Zimbabwe is caught in a military coup, and the domestic Bitcoin transaction price exceeds $14,000

Bitcoin prices on Zimbabwean exchanges have risen nearly 10% following the military’s recent coup. The country’s economy is notoriously weak; Zimbabwe’s highest inflation rate was in November 2008, when inflation reached 79600000000%.

Based on data provided by Golix, the price of Bitcoin in the country has risen to as high as $14,000, almost double the international market price.

Military coup

Zimbabwe has been in the grip of a military coup since November 14, with President Robert Mugabe facing the prospect of being deposed or having his power taken away. The 93-year-old president and his wife are under house arrest by the military. Although they are safe and unharmed, the situation has caused political unrest in the country.

With their currency almost worthless, Zimbabweans have started to accept a variety of currencies from other countries. The most common are the US dollar and the South African rand, and now Bitcoin has joined the ranks. Zimbabwean merchants also accept the euro, Indian rupee, British pound, and Botswana pula.

In addition to being used for investment, Bitcoin is frequently seen in countries around the world because people do not trust their governments or their own currencies. In addition, using Bitcoin to send funds around the world is an efficient and low-cost way. In Zimbabwe, more people have mobile phones than bank accounts, so Bitcoin has quickly become an alternative to traditional cash payments, and its operation mode is also simpler.

The power of cryptocurrency

Last week, bitcoin traded at nearly $13,000 in Zimbabwe after the military seized control of the country. The price surge is a testament to the future application and potential of cryptocurrencies, which are not tied to bank accounts, political unrest or inflation-induced currency devaluation and have quickly become a trading tool for people in countries suffering from economic recession.

It is difficult to establish data on the volume of virtual cash transactions between industrialized and developing countries, as Bitcoin is an anonymous method of cash transfer. However, we do know that Bitcoin is the most popular cryptocurrency among Zimbabweans.

Andrew Milne of the Altana Digital Currency Foundation said many countries are in urgent need of an asset that is different from traditional currencies and does not face the same risks.

Golix is ​​the only cryptocurrency exchange in Zimbabwe. The company processed more than $1 million in transactions last month. This is 10 times the volume in all of 2016. Since the platform is unregulated, the price of cryptocurrencies offered here is entirely subject to supply and demand. Regulation has indeed caused the price of Bitcoin in Zimbabwe to far exceed the global average.

Golix's website mentions that funds in Zimbabwean bank accounts have purchasing power limits. The company encourages people to invest in Bitcoin, believing that it is better than traditional currencies currently in circulation in the country.

As the military coup continues, the regime in Zimbabwe remains unstable. However, it is clear that President Mugabe's rule has come to an end. Meanwhile, the price of Bitcoin continues to rise around the world, breaking through the $8,000 mark this week.