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As bitcoin is now exploding and imploding on a daily basis, going to $8,000 to current lows of $6,300, the “people’s currency” thrives in the state of Zimbabwe. Bitcoin seems to offer “rare protection from the onset of hyperinflation and financial implosion”, says The Hindu Business Line.
Zimbabweans are afraid of their currency losing value in their bank deposits with each and every day and turn to Bitcoin for funding and different activities such as paying for their children’s education abroad.
Thus, while bitcoin is now losing some of its market capitalisation and value in developed markets, on Harare’s bitcoin exchange, Golix (golix.io), the price of the digital currency hit the staggering $13,900.
The reason for this almost amazing situation is that Zimbabweans have experienced the devaluation of the their own currency (the Zimbabwean dollar) and thus, adopted the US one in 2009, according to The Hindu Business Line.
According to the online magazine:
“After a period of relative stability, acute shortages of dollar cash have set in, leaving Zimbabweans with electronic units in their bank accounts which are officially called dollars but have a far lower — and rapidly decreasing — value.”
Because of their lack in their banks and deposits, people in Zimbabwe have learned to attach value to anything that is not cash and holds some potential for the future such as real estate, cars, and now Bitcoin.
“For people like IT worker Arnold Manhizwa, a 34-year-old father of two, bitcoin is almost a safe-haven asset. He says he deposited $20 in bitcoin for his newly-born daughter a few months ago. Now it’s worth over $200. If I put that money in a bank right now in Zimbabwe I will be left with nothing.”