U.S. sanctions escalate, Venezuela's bitcoin trading volume hits record high

The U.S. government has escalated its trade embargo against Venezuela, which officially took effect on August 5th. This strong stance by the U.S. has led to a historic surge in Bitcoin trading volume on the peer-to-peer platform LocalBitcoins in the country.

Trump Supports Opposition Leader
In January of this year, U.S. President Trump issued a statement recognizing opposition leader Juan Guaido as the interim president of Venezuela and encouraged other Western countries to follow suit, subsequently gaining support from over 50 countries.

Therefore, in this executive order, Trump ordered the freezing of all Venezuelan government assets in the U.S., citing current president Maduro Nicolas Maduro's continued "usurpation" of power and human rights violations by his supporters as reasons for the escalation of the ban.

Venezuela has been experiencing significant economic turmoil due to the political crisis. Many countries, including the U.S., unanimously believe that Maduro's election lacked fairness and involved fraudulent activities, thus supporting opposition leader Juan Guaido in challenging Maduro's authority.

Reports indicate that this executive order will also prohibit U.S. citizens from engaging in transactions with Maduro or his government supporters, and ban entry into the U.S. for the people of Venezuela. However, exceptions are made for the transportation of food, medicine, clothing, etc.

Bitcoin Trading Volume Surges
Amid the conflict between the U.S. and Venezuela, the weekly trading volume of the Venezuelan Bolivar Bolivar against Bitcoin on the peer-to-peer trading platform LocalBitcoins has reached a historic high.

Reports from February of this year also indicated that Venezuela's rampant hyperinflation has continuously driven up the country's Bitcoin trading volume. The inflation rate of the country's official currency, the Bolivar, has surged from 929,789.5% in 2018 to the current 10,000,000%.

Although this ban does not amount to a complete trade embargo, it signifies a strong stance by the U.S. government. Previously, the Venezuelan government attempted to circumvent U.S. sanctions by issuing the Petro, a cryptocurrency backed by oil reserves, but this move seems to have brought no utility to the country's struggling economy.

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