Why does Zimbabwe Have a Sudden Interest in Bitcoins?

You may not remember, but a few years ago a trillion of Zimbabwe’s currency was worth less than a dollar. That story underscored the threat of hyperinflation and the worry still continues for the African nation.

Whenever there’s worry about paper money in any nation, people turn to reliable fail-safe commodities like gold. Cryptocurrency is also safe from inflation because no central authority prints it or controls its value.

Now, Zimbabwe continues to face issues with currency. It plans to switch to the US Dollar, but cannot print the money, as only the US can do that. This leaves them reliant on imported cash, a highly risky situation to be in. Economists are pointing to the country’s rapid increase in supermarket prices, which have shot up by 150% in the past two months.

Locals businesses are unable to operate in such a damaged economy. Software engineers are using Bitcoins to buy software and local enterprises are doing the same for hiring transport vehicles and materials.

All of the reasons mentioned above have led Zimbabweans to cryptocurrencies, and Bitcoins, in particular, to conduct their business operations and even go about their daily lives. 1 BTC was trading as high as $9,899 dollars, and prices are wildly fluctuating as we speak. The global average of Bitcoins is roughly $5000, about half of the value in Zimbabwe.

Unlike before, where there was plenty of cash that was of no value and could not be used to buy things, the problem Zimbabweans now face is that they have too little cash with which to buy things. They hope that cryptocurrency can solve their problems.

While cryptocurrency is safe from inflation, it should not be approached in the way that it has in Zimbabwe. When there’s a mad rush for any investment option, it destabilizes the market and can have consequences that ripple out over time. The system is also subject to abuse -as wily investors can make a profit out of the unnatural price surges in the country.

That said, the fact that people can see the benefit of cryptocurrency, specifically how it is immune to inflation by its very nature, is a good sign for the industry. When governments do employ better financial policies and regulations related to cryptocurrency, the kind of situation that has arisen in Zimbabwe is likely to be prevented.

There’s one thing that’s certain: cryptocurrency is certainly taking the world by storm. Stay tuned to Money Trade Coin to hear all the latest news about digital currency.

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