Until recently, Bitcoins were considered as a fad which will lose its presence in the market with time. But, with a huge surge in the value of cryptocurrencies, it has left many experts and new investors puzzled about its future and real valuations. As of today, BTC is trading over the $7100 level and is one of the most successful wealth generators of time against any traditional instruments.
Bitcoin may not have been granted as a legal currency in any of countries around the world, but it looks like the currency holds potential for many emerging markets or developing countries. Zimbabwe holds the perfect example for the same. Bitcoins in local Zimbabwean exchange Golix are trading at a premium of 87 percent over the global average at around $12400 and an increase of $2400 since October 20.
The source of this huge rise over global average is due to collapse of its own financial structure. Since 2009, it had to suspend its own currency due to hyperinflation issues and was replaced by US dollar bill but there is not enough supply of currency. And, all governments bonds have plunged into the black market now which are not accepted by any foreign entities. Locals have to wait for hours get funds from banks. And the rise of the value of bitcoin is attributed to this trouble.
Locals are acquiring bitcoins because it can be acquired without cash and can spend it any foreign country. And, on the event holder wants to liquidate his holdings then he/she has to arrange buyer with cash and need to complete the peer to peer trade.
Yeukai Kusangaya, trade coordinator in Golix bitcoin exchange told the local news outlet The Standart: “It is not necessary to have cash to buy bitcoin. Most people just use the generally available electronic means. As such, the buying of bitcoin is not affected by the prevailing cash shortages… in the event that a seller wants cash for bitcoin, they will have to identify such a buyer with cash on their own and do a peer to peer trade.”
Some experts in the country feel that the government will try to avoid regulating the digital currency because if it fails in the process it will bring in further financial instability in the country. Zimbabwean technology analyst Nigel Gambanga told CNN that “the situation is so dire he would not be surprised if the government formally regulates bitcoin or even considers adopting it as legal tender.”