Is Bitcoin Really Selling For $76K In Zimbabwe?

Is Bitcoin Really Selling For $76K In Zimbabwe?

Concerns over inflation in Zimbabwe have affected bitcoin prices in the country. Graphic by Autumn Keiko

Zimbabwe’s recent ban on local trading in foreign currencies has produced fears that bitcoin will become unaffordable in the country, but analysts are skeptical.

Local traders in Zimbabwe have reportedly seen asking prices as high as $50,000 per bitcoin when they try to purchase the cryptocurrency from abroad, according to FXStreet.

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Bitcoin was trading at $11,368 on the international market on Tuesday, according to Coinbase.

In June, Zimbabwe announced that it would abandon the use of foreign currencies, including the U.S. dollar.

When the Zimbabwean dollar was devalued by hyperinflation in 2008, it was replaced by the U.S. dollar.

An interim Zimbabwean currency called the RTGS dollar, aka zoller, has been renamed the Zimbabwe dollar and has now become the only legal tender in Zimbabwe, IOL reports.

Zimbabwe plans to print 400 million Zimbabwe dollars, to be gradually introduced into circulation to fill the gap left by the end of dollarization.

Bitcoin price driven by hyperinflation concerns in Zimbabwe

Amid recent fears of the potential for hyperinflation, bitcoin has become a viable and popular way of buying big-ticket items in Zimbabwe, driving the price of the cryptocurrency on the local exchange, Cointelegraph reported.

On July 1, Twitter posts claimed that that bitcoin was trading as high as $76,000 in Zimbabwe, which would have represented a premium of more than 600 percent.

These claims appear to have been backed up by a screenshot in a tweet from Bitcoin Expert India.

But subject matter experts from a couple of reputable cryptocurrency companies have been skeptical of the claims, CoinTelegraph reports.

Tuur Demeester, founding partner at Adamant Capital, argued that these claims likely represent inflation that is not recognized by the government.

Responding to one of the claims, he expressed an opinion that the alleged figures do not reflect the genuine premium in Zimbabwe.

Mati Greenspan, senior market analyst at EToro, agrees with Demeester.

He tweeted that the massive 600 percent bitcoin markup in Zimbabwe is a reflection of the black market rate for U.S. dollars held in EcoCash, a mobile money transfer and microfinancing service in Zimbabwe which has “just been rendered virtually worthless by the government.”