- Bitcoin is close to $ 15,000 in Lebanon’s P2P marketplaces, as the country’s official Fiat crashes 50 percent in just one month.
- The international bitcoin rate is just over $ 7,500.
- Lebanon is facing its worst economic crisis. Inflation reaches record highs amid the liquidity crisis.
Bitcoin trades almost twice as fast in an economically affected Lebanon as it currently does.
Peer-to-peer Bitcoin marketplace LocalBitcoins.com shows people selling the cryptocurrency for up to 22,678,227.03 LBP per token, which is about $ 15,000. In the meantime, people who want to liquidate Bitcoin for the local currency are demanding up to $ 11,000 per token.
The exchange rates that come from Lebonan crypto marketplaces are strikingly higher than their global counterparts. The data aggregator Messari shows that the Bitcoin price is just over $ 7,500 – almost half what the Lebanese traders are asking for.
Bitcoin reaches its premium price level in Lebanon as the country has been struggling with the worst economic crisis in decades. The Lebanese pound has collapsed nearly 50 percent from its dollar-bound value since October 2019. This has triggered inflation, fueled social unrest and excluded the Lebanese from their US dollar-enabled bank savings.
The central bank issued an order that allowed dollar account holders to withdraw money in local currency, but before April 23. The ruling should alleviate dollar demand, but caused people to panic. The country has one of the largest diasporas that send and receive money in foreign currency.
In Lebanon, electronic payments are blocked and geographically restricted. Bitcoin is still only traded by OTC and rarely finds someone who knows about altcoins lol
– $ TRXMan (@TRXMan_R) April 17, 2020
Bitcoin peaked in Lebanon amidst the said chaos, confirming Al Jazeera’s late February reporting that Lebanese chose cryptocurrencies to protect themselves against inflation.
“If you want to bypass the banking system, Bitcoin is a solution,” a local crypto trader told the intelligence agency.
The cryptocurrency works outside the control of central authorities. A distributed group of miners offer their computing power to review, validate, and add transactions to their open ledger, known as blockchain. No single company takes control of the Bitcoin network and makes it an independent financial system.
The Lebanese central bank is preventing people from trading Bitcoin, one reason why traders are choosing peer-to-peer alternatives to buy and sell the cryptocurrency.
The Bitcoin Use Case Pops
Bitcoin’s premium rates in Lebanon prove that there is more local demand for cryptocurrency than for available supply. People are buying it in bulk to get out of their difficult Fiat system and create a parallel economy that is beyond the reach of their government and central banks.
Lebanon would be ideal for a decentralized currency. It would solve the lira problems. End corruption. Weaken cult leaders. It could be supported by bitcoin. People would have to collectively agree to use it. Lebanon would benefit from decentralization. Not impossible to do.
– Omar Khalil (@omargkh) April 22, 2020
All in all, Bitcoin has once again shown its true potential in a difficult economy. In addition, given the global chaos, the cryptocurrency could prove to be a financial savior for an average saver.
Photo by André François McKenzie on Unsplash