P2P BTC trading volumes jump to highest since 2018
The peer-to-peer BTC trading volume has jumped significantly in the later stages of the global pandemic. In the first week of August alone, experts recorded almost $95 million worth of BTC changing hands on just two platforms.
Most of the volume increase is attributed to Latin American countries, especially Venezuela which has the largest share in the increase this year. Experts have noted that such a volume has not been seen in the crypto market since the 2018 January crypto winter.
All of this indicates a healthy crypto market emerging from a slump that is very natural for a young asset. Investors and traders are putting more and more trust in crypto as time goes by, especially in struggling economies of the South American continent.
According to current measures, South America alone has almost $13 billion worth of BTC trading hands every single week. But this continent is not the only one seeing a surge.
Africa follows suit
Sub-Saharan Africa has also reported record volumes for the past couple of weeks, surprising many local crypto companies and sometimes even leading to bottlenecks as not enough power and resources were available to process all the trades.
Hundreds of market experts have already taken to crypto platforms and Twitter to discuss what has caused the recent surge, while many have already reached their conclusions.
Although P2P may indicate that the trade is being made from person to person, it doesn’t necessarily indicate this specific action when talking about cryptocurrencies. Many countries don’t recognize crypto wallets as “corporate accounts” or anything of the sorts, and there’s no real service for it either.
Therefore, instead of directly writing off volume jumps to just peer-to-peer transactions we need to look into where cryptos are most actively used and offered.
The iGaming industry
We can’t talk about “corporate crypto transactions” without mentioning the iGaming industry. It was one of the first sectors to adopt cryptocurrencies, as well as start developing their personal tokens.
Millions of people all over the world utilize BTC or any local token to access iGaming platforms. Most of it is done due to concerns on government surveillance on where their income is spent. Should iGaming pop up as a key location, the user is subject to blacklisting on future loan applications or sometimes even government jobs.
This is the primary reason why online casino slots are usually provided through cryptocurrencies. People simply deposit cryptocurrencies on the platform, convert them to fiat currencies of their choosing, and then continue using the service as if nothing happened. When withdrawing these funds, people either get them back as cryptos or transfer them to third-party digital wallets.
Another big crypto sector is eCommerce, especially smaller stores trying to sell hand-made or manufactured goods. Cryptos are usually used as a USP (Unique Selling Point). Most people would not have to bother with fast transactions on an eCommerce platform, especially if they are the customer, but for the eCommerce store itself, it’s absolutely vital that they get their funds as fast as possible.
This is especially the case with small businesses as they need to immediately re-invest, or use a client’s payment to make deliveries or even the products themselves.
Considering that there are millions of stores like these, it’s not surprising to see that volume there is booming.
Why low-income countries?
The main reason why BTC’s volume is jumping in Latin America and Africa is because of the local currencies themselves. Most Latin American currencies are very weak compared to the dollar, the same with African currencies too. However, the local population doesn’t seem to want to buy USD and hold on to it. It’s not going to grow too much over the course of 1 year. However, BTC has much more potential for growth and can buy enough goods that a person would disregard the USD.