The bitcoin market has been bullish for the past few weeks with more than 80% premium on the US exchange prices like coinbase. One might wonders why is the premium increasing when there is apparently low demand for the bitcoins in Zimbabwe.
Many investors and individuals are still skeptical to join the rush for the bitcoin. This is attributed to lack of knowledge about it works, thin disposal income, the premium itself.
The comments on the Facebook posts and different blogs writing about the bitcoin show people are interested but don't know where to start from. We all know Zimbabweans always want to utilize every speculation opportunity.
Although some individuals think the premium is unjustified and fear that it can be automatically adjusted by the market forces and information assymetry, the premium is likely to increase due to different reasons I will highlight in this post.
1. Everyone is buying
Most transactions on a local btc exchange are through ecocash. People are converting their plastic money into crypocurrency to hedge against currency risky. There is no point to sell your bitcoins or altcoins if you can't get your cash from the agents. This means there is limited supply of bitcoins on the market than demand. The demand will continue raise the price as more people are joining the market.
2. USD adjustments
The black market for USD have already anticipated devaluation of bonded currency against the USD and cash premiums are increasing every work. Since bitcoins are quoted in USD, there is an adjustment to the price to match the exchange rate
3. Limited payment options
Since many Zimbabweans can't buy bitcoin on other BTC exchanges due to lack of international payments options, the premium will continue to increase. The ease of payment through ecocash will obviously attract a premium for ibternationally tradable cryptocurrency.
Many investors and individuals are still skeptical to join the rush for the bitcoin. This is attributed to lack of knowledge about it works, thin disposal income, the premium itself.
The comments on the Facebook posts and different blogs writing about the bitcoin show people are interested but don't know where to start from. We all know Zimbabweans always want to utilize every speculation opportunity.
Although some individuals think the premium is unjustified and fear that it can be automatically adjusted by the market forces and information assymetry, the premium is likely to increase due to different reasons I will highlight in this post.
1. Everyone is buying
Most transactions on a local btc exchange are through ecocash. People are converting their plastic money into crypocurrency to hedge against currency risky. There is no point to sell your bitcoins or altcoins if you can't get your cash from the agents. This means there is limited supply of bitcoins on the market than demand. The demand will continue raise the price as more people are joining the market.
2. USD adjustments
The black market for USD have already anticipated devaluation of bonded currency against the USD and cash premiums are increasing every work. Since bitcoins are quoted in USD, there is an adjustment to the price to match the exchange rate
3. Limited payment options
Since many Zimbabweans can't buy bitcoin on other BTC exchanges due to lack of international payments options, the premium will continue to increase. The ease of payment through ecocash will obviously attract a premium for ibternationally tradable cryptocurrency.
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