The volume of bitcoins (BTC) traded on the LocalBitcoins platform, for the Venezuelan market, fell last week to levels of five years ago. Between April 19 and 25, operators exchanged a total of 53 bitcoins, a figure not seen since April 2016 when the service had a liquidity of 52 BTC. The drop could be related to Binance’s P2P service.
The decline in volume has become more evident in recent weeks, but the behavior has occurred since mid-2020, according to Coin Dance records. The volume of a year ago, for example, contrasts significantly since 12 months ago Venezuelans exchanged between 500 and 700 BTC.
The decline is also falling by its dollar equivalent. According to Useful Tulips metrics, in December of last year up to 7.1 million dollars were traded weekly, while for the last week of April the figure was 2.8 million dollars. This last figure was not registered since April 2018.
Although the country continues to lead the figures in Latin America for this specific peer to peer (P2P) market, Colombia continues to approach with weekly volumes that are around 2.3 and 2.4 million dollars. The growth in this case could be related to the sending of remittances from the neighboring country due to the economic crisis facing the nation.
In a previous interview with CriptoNoticias, Vladislav Alimpiev, community and partnership manager of LocalBitcoins, explained that in Venezuela between 4 and 5 million dollars were traded weekly, which represented up to 12% of all LocalBitcoins trade volume on a global scale .
At its highest point, Venezuelans traded, during the first week of February 2019, almost 2,500 bitcoins. At that time, the price of BTC was around $ 3,600 per unit, a far cry from the current prices of around $ 52,000. This aspect could be influencing the amount of BTC required to make payments, for example.
“Binance effect” on declining volume
The decrease in the volume traded in LocalBitcoins, within the Venezuelan market, coincides with the arrival in the country of the p2p service of Binance, the largest cryptocurrency exchange in the world by volume traded. Since April last year, local operators are also exchanging their bolivars for bitcoins on this platform, as reported by CriptoNoticias.
As a strategy to gain interest among Venezuelan operators, Binance announced that it would not charge commissions for exchanges made on its P2P platform, something that would be affecting the reach of LocalBitcoins within the oil country.
Officially in LocalBitcoins only BTC are traded. However, in Binance’s P2P market, users can exchange bitcoins, ethers, DAI, tether, BUSD and BNB, which could also be catching the attention of traders in Venezuela.
Remember that other peer-to-peer platforms also serve local users, although not with the same volume of LocalBitcoins. Other alternatives are: LocalCryptos, Cryptoway.io, LocalCoinSwap, Hold Hold, and Bisq.