In the past year the volume of cryptocurrency trading has increased significantly in the markets that are just developing, rather than developed.
The interesting thing is that the more the government tried to prevent the trade in cryptocurrencies, the more prosperous trading. Somewhere in the world, Satoshi is smiling right now. Practice has shown that Bitcoin has managed what Nakamoto created it (or created) in 2008. Avoiding the banking and government oversight and the devastating effect of inflation – this is the purpose that Satoshi put before his creation.
According to LocalBitcoins, the amount of cryptocurrency trading in countries where it is a fledgling market, ahead of the volume of the world’s largest market – the US. It is significant that the demand has increased in China, where the government bans cryptocurrency trading; in Venezuela, where the government is “strangling” of the miners; in Brazil and Colombia, where residents and then are told about the terrible risks associated with cryptocurrencies.
“The strong interest shown by the markets of these countries can be attributed to the low stability of the Fiat money of these States, or side effect of the financial and economic crises. All this makes Bitcoin quite attractive,” said Spencer Bogart, head of the research Department in the Blockchain Capital LLC in San Francisco.
Cryptocurrencies don’t depend on banks or financial institutions. They are traded on online exchanges can be transferred anywhere in the world and controlled only by the holder. The creators of Bitcoin to avoid inflation, which occurs when emission of Fiat money, has clearly defined its maximum limit of 21 million tokens.
In China, where authorities have banned all cryptocurrency exchange transactions, P2P trade has grown more than 2000%. In Russia, where President Vladimir Putin has warned that use of the cryptocurrency entails the “serious consequences”, trade grew by almost 200%. Meanwhile, in U.S. trading began, about 20% more.
This week, after the launch of the CBOE futures exchange, Bitcoin has proliferated on wall Street. The growth of the leading cryptocurrency made up 1700% for the year. Futures on Bitcoin will be traded on the stock exchange CME from 18 Dec.
Data Google Trends also reflect the growing interest of users in emerging markets.
“Five of the six countries where Bitcoin is most often looking for information in search engines, are the countries whose markets are still on the path of development,” says Bogart.
In Nigeria, which is on the top list of Google Trends, the growth of p2p transactions has increased by almost 1500%. This happened after the country had gone through a “major overhaul” of the monetary system, weakening the Naira by 12.4%. The share markets have not yet fully formed, in total world trade of Bitcoin increases. China and Russia together occupy approximately 40% of the market.
The growth of demand led to a divergence in prices. One BTC local exchange NairaEx in Nigeria NairaEx 12 December cost 7,230,098 Naira, which translated into dollars out is 15% more expensive than in the US. If you continue to compare with the US, prices are higher on exchanges in Russia and Argentina, but Colombia, Singapore and Brazil.
Not all Central banks of countries with a developed market, trying to regulate crypto-currencies, but some of them made cautionary statements.
Central Bank of Brazil noted that “digital currency not backed by guarantees and support for any controller and no guarantees that they can be converted into the national currency”. This year P2P trading in Latin America increased by 450%.
State Bank of Colombia stated that the digital currency is not recognised by the authorities and threaten financial stability. Meanwhile, the peso sank more than 3%, strengthening the position of cryptocurrencies. Authorities of Turkey and India also warned supporters about the risks of bitcoins.
Of course, not the fact that strict regulation of the state increases demand for the cryptocurrency. Perhaps at first there was a demand caused by high inflation or long-term restrictions on withdrawing Fiat currency out of the country, which prompted people to buy Bitcoin. A ban started then.
The growth of demand for Bitcoin is “not surprising”, given that he has the support of the state and is not legal tender, says Augustine Carstens, Director General of the Bank for International Settlements former Governor of the Central Bank of Mexico.
Simon Quijano-Evans, a specialist in strategic development of the company Legal & General Investment Management Ltd, said recently that the Central banks of the countries in which cryptocurrency market is not yet fully formed, should immediately “cut off the oxygen cryptocurrency”:
“Cryptocurrency throw potential challenge to the millennial arrangements that were made for building confidence, which led to the creation of Fiat money”