Venezuela has been listed as the third country with the most cryptocurrency adoption in the world by Chainalysis in its 2020 report. With its citizens coping with crippling inflation and losing purchasing power, the country has taken a turn for these assets to survive. But what are the real numbers behind this crisis that made Venezuelans change their whole way of living?
How Venezuela Adopted Crypto: The Numbers
It is a popularly known fact that Venezuela is one of the countries that have adopted cryptocurrency with the most force in LATAM. This was corroborated by Chainalysis in its latest 2020 Geography of Cryptocurrency Report, where it states that Venezuela is in fact the third country with the most cryptocurrency adoption in all the world. There is no doubt in what caused this: the economic disaster that was the result of years of wrong monetary policies, exchange controls, and corruption.
But how deep is the hole that Venezuelans are living in today? How Venezuela went from one of the richest countries in the region to become an inflationary mess in just a few years? It is difficult to pinpoint the numbers behind this disaster because official institutions have been withholding them for years. But several non-official sources can help us understand the magnitude of this crisis.
Inflation in Venezuela: One of the Highest of the World
While the Venezuelan economy always had a tendency to have important inflationary numbers, it reached a point of no return in 2014, with an annual increase of 69%. From that year, inflation figures worsen with each year, but the Central Bank of Venezuela stopped giving official numbers in 2015, which made it difficult to follow what was really going on in the country. For 2018, the International Monetary Fund estimated that the annual inflation would be 1,000,000%, a number that put Venezuela in one of the worst hyperinflationary escalates at that time.
This made Venezuelans who saved in…