Think bitcoin’s price of over $7,000 is absurd? Have a look at Zimbabwe.
As the country’s military seized power Wednesday, putting 93-year-old President Robert Mugabe under house arrest, the price of one bitcoin on a local exchange surged as high as $13,500 — a $1,500 swing in the space of 24 hours.
The demand for bitcoin has skyrocketed in Zimbabwe in recent weeks, with the Golix exchange recording $1 million worth of transactions in the last 30 days alone, compared to just $100,000 in the whole of 2016.
Zimbabweans are turning to bitcoin — as well as cars, real estate and stocks — as an alternative way to secure their money as fears that hyperinflation could wipe out people’s savings.
On Wednesday, people lined up in long queues outside banks in Harare, with some reportedly sleeping overnight to withdraw their money.
This resulted in Zimbabwe abandoning its own currency in 2009. Since then the country has relied on U.S. dollars and the South African rand. But acute shortages of cash in recent months has left people with electronic units in their bank accounts that are officially called dollars, but have a far lower, and rapidly decreasing, value.
In January the price of $100 in cash was $120 in electronic dollars, or “zollars” as they have been nicknamed. Today, that price is $180 zollars.