• Home
  • Live Crypto Price
  • Contact
No Result
View All Result
  • Home
  • Live Crypto Price
  • Contact
No Result
View All Result
No Result
View All Result
Home Cryptocurrency

Venezuelan Currency Plunges Almost 40% Against the US Dollar, Analysts Cite Crypto Drought as Part of the Problem – Economics Bitcoin News

Sergio Goschenko by Sergio Goschenko
November 27, 2022
in Cryptocurrency
0 0
0
Venezuelan Currency Plunges Almost 40% Against the US Dollar, Analysts Cite Crypto Drought as Part of the Problem – Economics Bitcoin News
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter


The Venezuelan fiat currency, the bolivar, has lost almost 40% in its exchange rate against the U.S. dollar in a month. According to reports, the seasonal payments that the government has to make, and the lack of liquidity of the government to intervene in the currency market are part of the equation leading to this, however, some also include crypto as part of the problem.

Venezuelan Currency Takes a Nosedive

The Venezuelan currency, the bolivar, has been losing its value at an alarming rate after enjoying a period of relative stability recently. The currency has lost almost a 40% against the U.S. dollar in parallel markets, with citizens being alarmed at the accelerated pace of the devaluation. According to the popular price index Monitordolar, each dollar had a price of 9.05 bolivares on Oct. 25. The exchange rate increased to 12.63 bolivares per dollar on No. 26.

There are several explanations for this plunge. According to analysts, this nosedive was expected due to the elevated spending that is common in the Christmas season, a consequence of the elevated liquidity put into the market due to the bonuses and payments that the government and other companies deliver to workers.

This is the part of the theory that Venezuelan economist Jose Guerra has formulated on this issue. Guerra stated:

Demand for bolivars has fallen due to high inflation so when bolivars go into circulation, the public turns to buy goods and dollars to hedge against inflation and devaluation.

Asdrubal Oliveros, head of Ecoanallitica, an economics research firm, also explains that the Central Bank of Venezuela has not been able to intervene by injecting liquidity into the official exchange market. This is due to the lack of dollar inflows for different causes, including sanctions that difficult the movement of these funds that are mostly collected in cash for the sale of oil. In August, the Venezuelan currency also lost 35% of its value against the dollar in just one week.

Crypto’s Influence

However, apart from the usual suspects, Oliveros also believes that there is a crypto element that makes this situation more severe. Oliveros states that most of the parallel currency market, which does not depend on government intervention, was currently being fed by market makers that used cryptocurrency exchanges as a way of injecting these funds into the country.

However, due to the ongoing downtrend that the cryptocurrency market faces, and the lack of confidence in centralized exchanges associated with the downfall of FTX, one of the biggest cryptocurrency exchanges in the world, these market makers have limited their exposure, leaving the market illiquid and contributing to the scarcity of dollars.

The economist expects the exchange rate to keep rising as these problems go bigger in the next few days, qualifying the situation as a “perfect storm” for devaluation to keep growing.

Tags in this story
Asdrubal Oliveros, Bolivar, Devaluation, dollar injection, ftx, jose guerra, Liquidity, Market Makers, Monitor Dolar, Sanctions, U.S. dollar, Venezuela, venezuela fiat currency

What do you think about the recent plunge of the Venezuelan Bolivar against the U.S. dollar? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

More Popular News

In Case You Missed It





Source link

Previous Post

Prospects Don’t Look so Hot for Sam Bankman-Fried’s Invitation-Only Crypto Bahamas Event – Bitcoin News

Next Post

Fidelity Opens Retail Bitcoin Trading – Bitcoin Magazine

Sergio Goschenko

Sergio Goschenko

Next Post
Fidelity Opens Retail Bitcoin Trading – Bitcoin Magazine

Fidelity Opens Retail Bitcoin Trading - Bitcoin Magazine

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Trending
  • Comments
  • Latest
Pantera Capital CEO: Bitcoin (BTC) Could Hit $115k after Halving

Pantera Capital CEO: Bitcoin (BTC) Could Hit $115k after Halving

May 5, 2022
BOLT12, LNURL And Bitcoin Lightning

BOLT12, LNURL And Bitcoin Lightning

June 20, 2022
Jack Dorsey Muses on Social Media ‘Takeover,’ Ethereum Weaknesses; Plus the Latest in Crypto Mining — Bitcoin.com News Week in Review – The Weekly Bitcoin News

Jack Dorsey Muses on Social Media ‘Takeover,’ Ethereum Weaknesses; Plus the Latest in Crypto Mining — Bitcoin.com News Week in Review – The Weekly Bitcoin News

April 24, 2022
Luna Foundation Acquires An Additional 37.8k Bitcoin Worth $1.5B, Bringing its Total Holdings to 80,394 BTC

Luna Foundation Acquires An Additional 37.8k Bitcoin Worth $1.5B, Bringing its Total Holdings to 80,394 BTC

May 6, 2022
Bitcoin Is Our Weapon In The War Of Ideas

Bitcoin Is Our Weapon In The War Of Ideas

0
Allianz Chief Economic Advisor Predicts Bitcoin Going Higher Amid Inflation

Allianz Chief Economic Advisor Predicts Bitcoin Going Higher Amid Inflation

0
Insurance Considerations For Bitcoin Miners

Insurance Considerations For Bitcoin Miners

0
Becoming A Sovereign Individual With Bitcoin

Becoming A Sovereign Individual With Bitcoin

0
Russia’s Largest Private Bank Launches Digital Asset Platform – Finance Bitcoin News

Russia’s Largest Private Bank Launches Digital Asset Platform – Finance Bitcoin News

February 5, 2023
Reduced To Penny Stocks In 2022, Public Bitcoin Miners Are Primed To Come Back

Reduced To Penny Stocks In 2022, Public Bitcoin Miners Are Primed To Come Back

February 4, 2023
Sberbank Set to Launch Decentralized Finance Platform Based on Ethereum – Defi Bitcoin News

Sberbank Set to Launch Decentralized Finance Platform Based on Ethereum – Defi Bitcoin News

February 3, 2023
CleanSpark Mines Record 697 Bitcoin In January, A 50% Increase Since December

CleanSpark Mines Record 697 Bitcoin In January, A 50% Increase Since December

February 2, 2023

Recommended

Russia’s Largest Private Bank Launches Digital Asset Platform – Finance Bitcoin News

Russia’s Largest Private Bank Launches Digital Asset Platform – Finance Bitcoin News

February 5, 2023
Reduced To Penny Stocks In 2022, Public Bitcoin Miners Are Primed To Come Back

Reduced To Penny Stocks In 2022, Public Bitcoin Miners Are Primed To Come Back

February 4, 2023
Sberbank Set to Launch Decentralized Finance Platform Based on Ethereum – Defi Bitcoin News

Sberbank Set to Launch Decentralized Finance Platform Based on Ethereum – Defi Bitcoin News

February 3, 2023
CleanSpark Mines Record 697 Bitcoin In January, A 50% Increase Since December

CleanSpark Mines Record 697 Bitcoin In January, A 50% Increase Since December

February 2, 2023

About Us

We bring you the latest bitcoin news from all over the internet

Categories

  • Cryptocurrency
  • Latest
No Result
View All Result
  • Home
  • Live Crypto Price
  • Contact

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In