Bitcoin Price Doubles In Troubled Zimbabwe

Tyler Durden's picture

A surprise political move by Zimbabwean president Robert Mugabe, who fired his deputy Emmerson Mnangagwa, has played havoc on the US dollar/bond note parallel exchange rate, as well as on Bitcoin price in the country.

image courtesy of CoinTelegraph

As CoinTelegraph reports, Bitcoin was already trading at a highly inflated rate in the troubled African country as its demand skyrocketed as a potential alternative to the dregs of a currency that Zimbabwe has left. However, that inflation has hit almost 100 percent as it trades about $13,000 per coin.

Trading on uncertainty

Unsurprisingly, with this latest political coup by the entrenched president, there is much speculation and worry about the already fragile and almost non-existent fiat currency system. Zimbabwe operates on bond notes linked to the US dollar.

Traders have been trying to move out of monetary assets as even on the dollar there is a 62 percent premium.

It has meant that investors are trapped by the currency shortages, seeking an alternative to exit the country - such as Bitcoin. Despite hitting a price of over $13,000 traders say that Bitcoin is booming as it is the strongest alternative.

Collapse of banking

Zimbabwe is beginning to act like an interesting case study for what happens when a country begins to collapse around its monetary system - it is also being witnessed in Venezuela.

Moving money out of Zimbabwe is starting to become impossible, and as people try and flee monetarily out of the crumbling state, they are finding refuge in Bitcoin.

Soon, banks in Zimbabwe have stated that Visa debit cards would no longer be usable for international payments without prior arrangements and pre-funding with hard currency.

“You will be required to make prior limit arrangements with the bank,” Stanbic said in a message to depositors last week.

Econet Wireless has also stopped foreign payments on its MasterCard linked EcoCash mobile money debit card.

Bitcoin as a refuge

Because of the decentralized nature of Bitcoin, there is no impact on it from this political upheaval, in fact, it is only benefiting from it. The Bitcoin premium of almost 100 percent is not because of the political issues, rather the high demand surrounding worry of collapse.

Bitcoin again shows its potential and power when the banking system again shows its potential for mass collapse and hysteria.

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God Emperor's picture

The Nigerian princes will be glad to help.

Soon they will ask for your bitcoin wallet to help them move out their coins.

J S Bach's picture

Monkeys with a money printing machine... hmmmm... not a surprising outcome.  At least (((our counterfeiters))) have the good sense to hide their manipulations imperceptively from the gullible public.  Patient inflation of the currency can be spread out over a much longer period of time.  But, impetuous blacks just can't resist the temptations of the cookie jar.  There are several cases of their having slaughtered white farmers, swatting on their landed prize and consuming the very seed corn for the following year's crops.  If that's not sub-Saharan stupidity, I don't know what is.

Bud Dry's picture

What ever happened to people shoving gold bars up their asses?

tmosley's picture

Oldbugs might do well to watch this:

You can substitute anti-Trumpers for oldbugs, crypto bulls for Trump supporters, and the rise of bitcoin for the election of Trump. If your brain will let you.

Buckaroo Banzai's picture

You can always jam a Trezor wallet up your ass if you're feeling nostalgic for that old-time wealth-smuggling feeling

bluerivercard's picture

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Gap Admirer's picture

Yep, could be the next BIG crypto moon-shot. Time to get in now. Go crypto!

Crypto haters gonna hate.

tmosley's picture

Plz kill urself my man, thanx.

Gap Admirer's picture

"Always against the person, never against the argument."

"Might as well say nothing."

Said by an anonymous former big-time old-bug loser, now bitcoin super-pumper.

Cognitive dissonance.

tmosley's picture

Peanutz LOOOOOOOOOOOVE scamcoin pumpers.

slyhill's picture

You forgot "not an argument"

tmosley's picture

You think that referal link spammers can be dissuaded with arguments?

BendTheFed's picture

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Peak Finance's picture

I like JSE Coin

Please stop giving it a bad name by spamming it everywhere you fucking asshole

null's picture

1 BTC == infinite something
1/10,000 BTC == same infinite something

They would trade their currency for used clothing at this point. 13K is super low, in other words.

ForWhomTheTollBuilds's picture

Can someone explain to me how a purely digital currency can trade at a price premium in one area like that?  

Agent P's picture

Because it's priced in US Dollars

DisorderlyConduct's picture

Well, and who's making the cut? If the commodity were physical, this would make sense. But it's bits, and not bound to a locale - so WTF?

hmmmstrange's picture

The problem is you cant take USD or gold out of Zimbabwe.

Citxmech's picture

Exactly.  If there's a premium, then BTC is not working as advertised for some reason...

Jay's picture

Zimbabwe dollars are supposed to be tied to US dollars. Obviously they aren't. The Zimbabwe dollar price for bitcoin represents the market's valuation of Zimbabwe dollars.

Wrenching Away's picture

Probably because they are just buying them locally with cash. I doubt that Coinbase is letting people verify with a Zimbabwe bank account.

maxblockm's picture

My guess is it's all about the cash exchange. 

You have to deposit the dollars into your bank, then transfer from bank to exchange.

But to deposit into bank,

they charge a hefty premium.

Think of it as a $6000 ATM fee, for deposit.

But if you have alot of cash you're trying to get out of Zimbabwe, a 40% haircut is better than 100%,
ala Breaking Bad S5E3 "Hazard Pay" @ ~38:53.
Pay the premium for BTC, or pay even more for the cash costs.

Then again, it's not purely digital:

TAALR Swift's picture

Why not convert it to Gold and bury it?

(Trick question)

Son of Captain Nemo's picture

"Buttcoin" + Zimbabwe + USD = PROPHETIC!

Greendawg's picture

if they did thier proper research they would know gold is king in Zimbabwe.  People are back to digging for 18 hours a day to mine fractions of a gram of unrefined gold just to survive.  They are destroying what little infrastructure they have to illegally mine gold.  The shitcoin pumptards dont want the facts get in the way of a good story though, especially when they are trying to steal from others with thier childish pumps.

Greendawg's picture

Gold was king during the last hyperinflation in Zimbabwe as well.

dasein211's picture

What do you do when your neighbor Mugabe finds out about your stash stuffed under the rock in the front yard? But if Mugabe finds out about your bitcoin, as long as he doesn’t own your private key, you’re money is safe. You, on the other hand, better run faster than a bullet in either case.

DisorderlyConduct's picture

Nah. They'll just let you scan your phone for a few btc and off you go. I hear they are all standup guys. And of course they accept btc. /s

Greendawg's picture

Mugabe isn't going to kill the only goose egg he has, in fact he is implementing many pro gold measures in an attempt to stabilize its next currency after this one has collapsed.  He wants to back the new currency with gold and is implementing laws to make mining more lucrative to outside investors.  I mean, its either mine, or admit they were wrong by purging the white farmers when the locals dont know how to grow crops.  Hmmm, tough decision for the cannibal/tyrrant.  PS nobody uses shitcoin in Zimbabwe.  60% of the population doesnt have access to electricity let alone a computer or smartphone.  

biloselhi's picture

Greendawg, Why are the Mozambicans the ones buying the gold at a premium though? I'd think the Zimbabweans would be the ones outbidding for it. 

bigfire's picture

I'm sitting next to my 100 trillion Zimbabwe Dollar Bill.  Still a good laugh.

Chet Ricco's picture

Someday soon it's going to be hard to tell our countries apart.

Bay of Pigs's picture

No hard numbers, no real facts, no proof and actual evidence that this is the case in Zimbabwe. WTF? That link in this story is 17 days old.

tmosley's picture

Seems like a pretty low volume exchange.  4.5 BTC traded in the last 24 hours. That is the price, though.

adr's picture

You may pay an exchange that much to buy a Bitcoin, but you are losing half your money because a Bitcoin authorized on the Blockchain can't be worth more than the official exchange. If you claim otherwise, your Bitcoin will just be ejected from the Block. 

tmosley's picture

Are you high? The dollar price of bitcoin is somehow encoded in the blockchain? "The official exchange"? Where's that?

FFS, get your shit together.

Bay of Pigs's picture

Seems? You really are dense at times.

The article is pure BULLSHIT. Got it now?

tmosley's picture

No, I don't get it.

Because that's not an argument.

0valueleft's picture

This is what inspired me 8 years ago. Refreshing in contrast to articles about CME futures and derivatives.

samsara's picture

And both computers had a line 2 miles long.