South Africa and Zimbabwe develop massive Bitcoin premium
- Bitcoin asking price in Zimbabwe is $50,000 after being banned by the government last year.
- Luno, a crypto-exchange in South Africa is showing a premium of $1000 for Bitcoin.
After the government of Zimbabwe banned bitcoin last year, Golix, the only crypto exchange was closed in May 2018 making bitcoin very rare in the country. Before being shut down, they had 49,333 users. Ever since this incident, it's been really hard for people to buy bitcoin in the country. The only way seems to be peer-to-peer unless of course, one's buying from abroad, in which case, the asking price is $50,000.
A crypto exchange in South Africa called Luno is presently showing a premium of $1000 for Bitcoin with high trading volumes. The premium developed because the country has introduced capital controls which forbids anyone to bring money in or out without authorization. Because of this, there is a disparity between South Africa’s supply and demand and the global supply and demand for Bitcoin, which explains the rise in price.
This just gives further credence to Bitcoin's reputation as a safe haven asset. FXStreet has earlier reported on Bitcoin gaining a premium in Hong Kong during the ongoing protests. Plus, LocalBitcoins reported record trading volumes in countries suffering from recession like Venezuela and Argentina.
Author
Rajarshi Mitra
Independent Analyst
Rajarshi entered the blockchain space in 2016. He is a blockchain researcher who has worked for Blockgeeks and has done research work for several ICOs. He gets regularly invited to give talks on the blockchain technology and cryptocurrencies.
