Peru, a country not commonly associated with bitcoin or cryptocurrencies, is experiencing a sizable surge in digital currency adoption following the first round of its presidential ballot process. The presidential candidate with the most vote support, Pedro Castillo, is known for his interventionist policies, so Peruvians might be preparing for what could be considered an economic downturn.
Peruvian Cryptocurrency Trading Volumes Ramp Up
The volumes of cryptocurrency traded in Peru have experienced significant growth during the week of the first phase of the presidential ballot, according to reports from Buda, one of the leading cryptocurrency exchanges in the country. This might have to do with how the ballot is expected to be defined, with a candidate with an interventionist take on the economy being the favorite to win.
Volumes of cryptocurrency trading shot up nearly 24.14% in the weeks of the presidential ballot, compared to the week before, and it kept growing the week after the elections, increasing by 24.36%. Almost, in the same way, bitcoin trade volumes also increased by 25.10% to 23.05% respectively in those weeks.
Pedro Castillo, one of the favorites to win the ballot, has an interventionist policy in regards to economic policy and has talked about nationalizing some key activities in the country, including mining operations, oil industries, and telecommunications. This has created some fears from citizens that might be turning to cryptocurrency to refuge from a currency devaluation in the future.
Peru Follows Argentina’s and Venezuela’s Footsteps
If this political change does happen, Peru might be the next country in LATAM to experience a cryptocurrency trading boom, as Argentina and Venezuela did before. Pedro Castillo is leading the polls with a 44.8% against his opponent, Keiko Fujimori, who trails second with 34.4% of the ballot intention, according to the latest poll from the Peruvian Studies Institute.
While it is still too early to predict what might happen in the country if Peru does go down the interventionist road, the currency devaluation might lead to exchange controls, which consequently might lead people to take cryptocurrency as an alternative to hedge their funds.
This is what happened in Venezuela and more recently in Argentina, where ailing citizens turned to cryptocurrency in inflationary driven economies. The decentralized nature of bitcoin and other cryptocurrencies make them perfect for this use case because they cannot be controlled by the states seeking to thwart the economic liberties of its citizens.
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