Bitcoin Price Soars To $13,000 In Desperate Zimbabwe

We noted in June that Zimbabwe's cash crisis continued unabated.

Those awaiting cash transfers at a bank may wait a month to be cleared and, even then, the transfer may be refused.

The Standard, Zimbabwe’s leading Sunday newspaper, ran an article at the time entitled, “Black market thrives, as banks run dry.”

Some highlights from that article:

HARARE’S Road Port has become the unofficial bank of last resort, never short of cash, no queues and a multicurrency platform. The money market at this busy bus terminus now plays the role that the formal banking sector has failed. It is effectively making a mockery of the Reserve Bank of Zimbabwe (RBZ).

This points to the nature of black markets. They thrive based upon fulfilling an existing need, not upon government control. They therefore replace whatever services the official market fails to provide.

“Top government officials, supermarket owners and service stations were behind the thriving black market, which is never short of cash.”

And now it appears many Zimbabweans have found an alternate way to store/transfer wealth away from Mugabe's prying (and confiscatory) eyes.

In September we noted the hyperbitcoinization occurring in Zimbabwe. In October, Zimbabwe demand started to impact the global price of the cryptocurrency, and two weeks ago we noted the doubling of the price of Bitcoin in Zimbabwe as uncertainty about the nation's stability sent citizens into a decentralized currency that was out of Mugabe's reach.

image courtesy of CoinTelegraph

Now, after the military coup confirms the average joe's fears, Bitcoin is trading at over $13,000 on Zimbabwe exchange Golix - a premium of over 80% over the USD exchange price as demand surged.

 

And the order book is full...

Bloomberg reports that demand for bitcoin in Zimbabwe has surged amid a shortage of hard currency.

Golix processed more than $1 million of transactions in the past 30 days, compared with turnover of $100,000 for the whole of 2016, according to data on the exchange’s website.

Zimbabwe doesn’t have its own currency, with the government adopting the U.S. dollar and South African rand, among others, as legal tender in 2009 after hyperinflation rendered the local dollar worthless.

According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay.

Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.

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As CoinTelegraph noted previously, 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.

Comments

Raffie balz Wed, 11/15/2017 - 14:37 Permalink

So I bought btc at $900 and its over $7k yet if I cash out I get nothing but $900?You're a funny little squirrel aren't yet?Odd that no matter what you spin doctors say my wealth keeps going up.....so weird...its like your nonsense has no effect on the real world. 

In reply to by balz

balz Raffie Wed, 11/15/2017 - 14:52 Permalink

You still get the same bitcoin you bought, which is the same as someone buying a tulip bulb in the mania and selling it later in the mania. It's only speculation. You wish to make money from a greater fool buying it back from you at a higher price.A bubble makes everyone look like a fool. Before it pops for those who refused to buy, and after it pops for those who bought. Watch and see.

In reply to by Raffie

QueeroHedge Gap Admirer Wed, 11/15/2017 - 18:09 Permalink

I acknowledge and respect that zerohedge has made an attempt to provide decent and even positive bitcoin coverage, but still the bitcoin criticism in the comments are embarrassing for a financial news aggregator. Tulips, ponzi? Are you fucking kidding? You are watching the birth of a new asset class, a libertarian goldbug's wet dream, and you couldn't be fucked trying to understand it for five minutes you astute investors? Had you put just 1% of the money you lose on busted shorts every year into bitcoin when guys like fonestar and myself were getting banned here years ago you'd be laughing.  Bitcoin is money that can't be inflated, that can't be touched by goverment or banks, it is a zerohedger's wet dream but very few of us here invested until this year. It isn't too late, if bitcoin survives, nothing is certain, it can only keep going up its current market cap is only 120billion ffs. 5-10% in crypto is a solid investment with obvious chance at retardo level profits, do it now cunce.

In reply to by Gap Admirer

NoCamelCase balz Wed, 11/15/2017 - 15:36 Permalink

Yes, Nasdaq is a much better analogy. After a dotcom bubble the stocks fell like what 70%-90%? Today some of those best tech stocks are making all time highs with multiple increases in price compared to the top of the bubble. It could very well be the same with Bitcoin (& other good crypto + shitcoins never recovering). If you look at the long term Bitcoin is still a buy even at these lofty prices. What's more, the Bitcoin price doesn't even matter - the technology is already a success and is here to stay the same way as the top tech stocks during the dotcom bubble.

In reply to by balz

MagicMoney NoCamelCase Wed, 11/15/2017 - 16:29 Permalink

Long term? No. You are not acknowledging the forces that are are propping up Bitcoin. The same forces that created the asset bubbles. The reality is Bitcoin is a speculatory mania created by central banking. We don't know exactly what the Federal Reserve will do as opposed what they are saying but if Fed is going to reverse back toward normalizing monetary policy Bitcoin I think is going to be crushed. I mean smashed..... I think it is a much more sensitive than people let on. People are going to sell when they are better allocations. Be careful now because when people buy together they can also sell together.

In reply to by NoCamelCase

Raffie ShorTed Wed, 11/15/2017 - 14:30 Permalink

Your basically talking about prepper items and the article is about cryptos. So was only talking cryptos.I stack silver as well, even though I don't see much gains for a very long time.Don't forever suppressors, subsonic ammo and night vision on your list. Female hygiene items will fetch a big money as well and are often over looked as well as toilet paper.  

In reply to by ShorTed

Raffie IH8OBAMA Wed, 11/15/2017 - 14:56 Permalink

I like cryptos and silver.Not my fault if you gotta have someone to hate because it is all you know. Your mindset seems kind of 'hurt them before they hurt you'. True signs of a bad childhood. I'm sorry for you.Lets see, my stacks of silver still pretty, but under the price I bought them at years ago.Cryptos have great gains and still growing.So why not be happy for me? You that mad and upset with people who are involved with cryptos that make profits?Seems pretty self centered of ya.... but whatever.... RAGE ON H83RS!

In reply to by IH8OBAMA

HRH of Aquitaine 2.0 Raffie Wed, 11/15/2017 - 16:13 Permalink

Same here. I don't understand the hate.

My silver is safe and sound. Still shiny in tubes and those 100 ounce RCM bars.

BTC is back up to where it was last week. I expect BTC $10K at the end of January.

I like the idea discussed by another poster of giving away Trezor or Nano wallets to grandkids / nieces / nephews as gifts. Smart!

In reply to by Raffie