Zimbabwean nationals have a good excuse to celebrate the end of dictatorship as President Robert Mugabe eventually stepped down. He encroached the state power and remained at the helm for 37 years. This November, he was detained by his own army. The power was taken over to the former Vice President without bloodshed as his political allies were actually longing for Mugabe’s resignation.
The political developments in the Southern African country highlighted interesting financial issues. Zimbabwe’s economy was so feeble that the government had to abandon the national currency which was losing in value faster than banknotes were being printed. Struggling with rampant inflation, the population had to seek alternative methods of private savings. The problem was resolved thanks to cryptocurrencies, in particular bitcoin. Interestingly, before Robert Mugabe’s ouster bitcoin’s value was already inflated in Zimbabwe as compared to international trading floors. However, after the military coup bitcoin has skyrocketed to $14,000 that is much higher than a new record of $11,000. The main driving force of its soaring price is robust demand. Recently, 16 bitcoins were sold over a single trading day on the local exchange, golix.com. Last month, 160 bitcoins were traded there.
One of the Golix co-founders commented that local bitcoin prices are quoted, depending on demand. Since 2000, the domestic economy has slumped twice and 95% of the working-age population has lost jobs. So, for most people in Zimbabwe bitcoin is the only way to save their shrinking finances.