Due to the liquidity challenges in Zimbabwe, the price of a single Bitcoin on Harare’s Bitcoin exchange has almost doubled in price on global Bitcoin exchanges.
The value of Bitcoin in Zimbabwe skyrocketed to an estimated $13,500. This came after armed forces in the country seized power early on Wednesday morning. Very often the cryptocurrency is seen as a risky investment. This is as a result of its extremely volatile price.
But, desperate Zimbabweans are now seeking to invest their money into anything of value as political turmoil deepens in the country. This has also sparked fears that further hyperinflation would again wipe out the value of citizens’ savings.
Taking over the national broadcaster on Wednesday, military leaders in Zimbabwe said that they had placed President Robert Mugabe under house arrest. This took place when the military forcefully took over power in the country.
According to local news reports Zimbabwean citizens could be seen queuing outside banks in Harare to withdraw their savings from early on Wednesday morning. Some citizens even slept outside financial institutions to secure their withdrawals. Due to the liquidity challenges in Zimbabwe, the price of a single Bitcoin on Harare’s Bitcoin exchange has almost doubled in price on global Bitcoin exchanges.
According to one publication, the current asking price for one Bitcoin in Zimbabwe beats October’s former record highs of almost $10,000. Yeukai Kusangaya, a well-known trade coordinator at the Golix Bitcoin exchange in Zimbabwe has said that interest in the cryptocurrency peaked in the country. This came after people found out that they could no longer send money outside the country or even pay for international transactions using the country’s formal banks.
He said that many people in Zimbabwe have had to look for alternatives. And for many who are able to invest in Bitcoin, it has been a useful solution. The currency could be used to purchase goods from Amazon. Citizens could even pay for vehicles from international suppliers and traders using the cryptocurrency. For many ordinary Zimbabweans taking a risk on Bitcoin has offered them relative stability.
Speaking to local media Arnold Manhizwa said that he had no choice but to invest his savings into Bitcoin. Manhizwa who works for an IT and telecoms company based in Harare said that for him it was the only way he could protect his investment and his future.
In 2009 Zimbabwe’s government adopted the US dollar following the downfall of the Zimbabwean dollar. The now defunct currency became worthless and wiped out the savings of all the country’s citizens. Following on from financial hardships, years of severe drought has already left a third of the population reliant on aid. This only worsened the situation for the country’s already fragile economy.