Venezuela Hyperinflation & Bitcoin Acceptance: COVID-19 Economics

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The Venezuelan economy tanked several years ago, arguably due to corruption that arose out of failed socialist policies. Consequently, businesses adopted bitcoin acceptance as an alternative to the failing Venezuelan Bolivar (VEF). Currently, there are reportedly over 20,000 companies in Venezuela that accept crypto as a form of payment, according to Cryptobuyer.

Crypto Merchant Gateway Cryptobuyer Partnership With Mega Soft

The Panama startup, Cryptobuyer partnered with the Venezuelan company, Mega Soft to expand the company’s processing capabilities. Mega Soft processes payments for thousands of local Venezuelan businesses on its platform, Merchant Server. With this expansion, Mega Soft will now accept Bitcoin, Ether, Litecoin, Dash, and the stablecoin, Tether (BTC, ETH, DASH, LTC, USDT). It will also process many other digital currencies, as well as fiat transactions. With this capability, the platform will enable merchants to settle transactions in both crypto and fiat.

Hyperinflation is Coming to the US, EU, and the World Due Coronavirus Lockdowns

It is completely realistic to expect another Great Depression to tank economies in the United States, the European Union, and elsewhere. Unemployment is at an all-time high, and governments are printing money and injecting it into the economy in response to a lack of production and wages. Experts say that lockdowns are necessary to flatten the curve. However, this potentially life-saving practice does not come without a cost.

Should these measures lead to hyperinflation around the world, billions of people may see their wealth disappear overnight. Savvy investors are therefore looking to move their fiat into other stores of value to preserve their wealth. They’re looking at the stock market, gold and other precious metals, and crypto. Bitcoin is the most logical choice for many of these investors.

Bitcoin vs. the Bolivar and Volatile Economies

Many investors fear Bitcoin’s volatility and prefer more conservative investments. However, if you compare Bitcoin to the Bolivar, it’s a far better store of value. Hyperinflation hit 10 million percent in 2019. As a result, what little wealth people did have was evaporated by the very act of participating in the state-run economy.

Smart Venezuelans realized that crypto was a better bet, and they became early adopters in trading Bitcoin and other digital currencies as part of everyday life. Compare this to the practice of wearing surgical masks in countries like China. Many Americans viewed the practice as silly and paranoid. However, due to COVID-19, many people in the U.S. have recently adopted wearing masks as part of every day life. Similarly, as a consequence of a current and expanding economic depression, we may see Americans and others begin to adopt the use of Bitcoin and other digital currencies in everyday transactions.

Protect Yourself From Inflation

Nobody knows what will happen with the economy after the lockdown ends. Furthermore, opinions like the one expressed in this article are not financial advice. But we do know that tens of millions of people in the U.S. are out of work. We know that Congress is toying with the idea of a $2,000 per month UBI (Universal Basic Income). And we know that companies are going under. We are, in effect, in a depression, and it may take a decade or more to recover. With this in mind, smart people are diversifying their savings. They’re keeping some money in the bank, and they’re also buying stocks, buying gold, and buying Bitcoin and other cryptocurrencies. Just keep in mind, there could be a Bitcoin breakout and an all-time high for BTC, or a massive dump after the Halvening. So, don’t invest what you are not prepared to lose.

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