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The Venezuelan Market is attractive to investors of Bitcoin

The Venezuelan Market is attractive to investors of Bitcoin

Posted by Dubraswka Aguilar on October 20, 2014

Investors think Venezuela can be a lucrative market for the digital currency Bitcoin despite the country’s well-documented economic struggles.

Venezuela has had low foreign currency reserves, and is nearly defaulting on its debt. As the country grapples with this, Bitcoin investors are hoping for a new market.

The black market exchange rate in Venezuela is 100 bolívar to one U.S. dollar, 16 times the official rate. Bitcoin supporters say their currency could help overcome Venezuela’s distorted currency market because its rates are lower than the black market, which would make it easier for people to purchase goods.

While alternative currencies like Bitcoin are an attractive option for some Venezuelans, as shortages of dollars reach alarming levels, state governments in Latin America have taken steps to ban it. Ecuador and Bolivia outlawed Bitcoin in 2013, but it has gained a small market in Colombia. The virtual currency has seen market volatility, and has been linked to a serious crime in Latin America.

In Caracas, however, Bitcoin supporters don’t think government bans should worry potential investors.

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