Interest in bitcoin has increased all over the world with Google and Baidu searches showing a spike or all-time highs in numerous countries. Particularly, interest has rapidly increased in Venezuela, Brazil, Nigeria and India with China’s Baidu showing a recent spike.
The most striking increase is in Nigeria. The country is suffering from a recession due to falling oil prices as well as high levels of inflation with concerns raised regarding the stability of its banking system. Umaru Ibrahim, managing director and CEO of the Nigeria Deposit Insurance Corporation (NDIC) recently stated:
“Another phenomenon emerging in the banking and financial landscape is the emergence of what is known as bitcoin. I understand that a lot of people have started to patronize bitcoin.”
As we can see from the image below, there was hardly any awareness of the cryptocurrency in Nigeria, but that began to change around June this year and has kept increasing since.
A country in a somewhat similar, but much more severe, situation is Venezuela. They have been suffering from hyperinflation for some time, with the economy completely collapsing this year. Bitcoin interest in Venezuela has been gradually increasing since 2013, but accelerated around June 2016 and continues to increase.
Venezuela’s neighbor, Brazil, has seen a similar increase in bitcoin searches. The country suffers from a relatively high level of inflation, around 9% per year, sending Brazilians in search of more stable stores of value with bitcoin trading in Brazil recently surpassing gold trading, according to a recent report.
India’s unilateral decision to ban high-value notes in an attempt to control the country’s relatively high inflation likewise sent interest in the cryptocurrency to near all-time highs. That appears to have somewhat subsided recently, but whether the move will actually lead to lower inflation remains to be seen.
China’s move to devalue its currency in May 2016 has led to a gradual increase of interest in the country according to Baidu searches with a more recent spike this month. All these factors have combined to form a weekly cup and handle in bitcoin’s price with the recent moves apparently confirming a textbook example of a cup and handle.
Price is not always predictable through technical analysis. No one can say whether it will go up or down or remain stable. Any unexpected event may suddenly create panic, causing fast price moves of 50% or more loss in value. Extreme caution should be taken, but the data suggests interest is considerably increasing in countries where authorities have badly mismanaged their currencies, from China to Venezuela, India, Brazil and Nigeria. Moreover, George Kikvadze, Vice Chairman of Bitfury, one of the biggest miners, publicly stated:
Last 24hrs couple of $10bln+ AUM Funds calling to buy 30k-50k bitcoins.. We were not selling then / not selling now
— George Kikvadze (@BitfuryGeorge) December 21, 2016
Image from Shutterstock.