Although it is difficult to determine the amount of bitcoin demand in the informal markets of the Middle East, some traders from various countries in the region say that bitcoin is attractive as a reserve asset (and not a speculative asset) that is attractive to anyone. Another time has increased.
Rami Mohammed Ali, a bitcoin extractor and trader from Palestine, says the pressure to sell BTC in local markets has disappeared and sharply increased demand from buyers.
According to the Palestinian trader, he has so far been able to sell 30 Bitcoin to 90 customers, a significant increase from his hard-earned sales in September of last year, which was able to sell 20 Bitcoin to 50 customers in a month.
Rami pointed out the reason why people are attracted to bitcoin because of the quick access to money whenever they need it.
This story seems to be true throughout the Middle East. An anonymous Syrian trader whose family lives in Lebanon said that small business owners in Lebanon are being challenged to pay their purchase invoices abroad, so some Lebanese families who are familiar with overseas and have mastered computer skills Are doing so by purchasing BTC and reviewing it overseas through their friends and acquaintances.
In fact, according to several Bitcoin traders in the region, a number of amateur traders who are learning to trade fast, are looking to buy bitcoin these days as the global financial markets collapse.
In Iran and Tehran, too, according to an anonymous bitcoin holder, people are more interested in keeping their assets in gold, dollars, real estate, and bitcoin. Due to the spread of the Corona virus in Iran, the country’s bad economic situation has also accelerated. Viral outbreaks mean fewer bitcoins, as well as the quieter sound of traders amid the public’s lost trust in various institutions.
According to this anonymous bitcoin, bitcoin is a revolutionary product, but it needs to undergo some major changes. In the past, he said, people thought Bitcoin was a new type of scam, but now Bitcoin is more trusted than ever.
According to Gattrade statistics, over 30 Iranian companies currently use bitcoin for their cross-border transactions instead of Fiat. But a spokesman for the statistics firm declined to name the companies because the biggest obstacle to accepting bitcoin in the Middle East appears to be international sanctions that are not limited to Iran.
Yemeni bitcoin trader Mohammed al-Sabhi, also pointing out that the Yemeni bitcoin market is much smaller than in other countries in the region, said there may be only 5 people each month trying to buy bitcoin. Censorship of communications networks is one of the major causes of the bitcoin market’s growth in the region, but there is still a strong interest in computer science in the educated class.
Al-Zabhi says that if it had the capacity in developed countries, it would have made great progress. The Yemeni trader, citing bitcoin sales troubles in his war-torn country, says many global trading companies have removed Yemen from their list.
He hopes Yemen can also access the global crypto markets and trading opportunities someday. But the war, he said, is the biggest obstacle to accepting bitcoin in his country, which has led to sanctions. For example, he points to the inability to download wallets through Google Play. The story of sanctions that has alienated citizens and individuals eager to learn about digital currencies.
The impact of sanctions
Yemen is a small example of the global challenges that people face in decentralized monetary networks.
It is worth noting that the battle between the Yemeni Houthis and the Saudi-backed Central Bank has created a currency war in the country. Yemeni activist Abdur Mansour Hadi also considers Yemeni President one of the pinnacles of the Saudis. To that end, the sanctions have also had an impact on citizens trapped between the failed banks and the parties involved.
Hassan al-Haifi, a former banker in Sanaa, says Yemen’s largest population is in areas controlled by the Houthis, which are also involved in the country’s economic activities. According to him, digital currency or electronic money can help Yemenis under tough sanctions, and Sanaa is embracing an autonomous currency structure.
Ben Freeman, a former oil trader at Goldman Sachs and managing director of Serie Comoditiz, says the value of digital currencies in the Middle East is due to its decentralization and resistance to censorship. In his view, the current bitcoin fluctuations have not affected its valuation, especially since the Yemeni war could also be a threat to Saudi Arabia’s oil production.
Freeman says the recent sharp sell-offs in financial markets have mostly occurred in assets whose sales have provided a guarantee of lost positions. According to him, if corporations go bankrupt, and Bitcoin is independent of any state institution, then we should see more people rush to buy Bitcoin as an asset.
The barriers that prevent Bitcoin from being adopted in the Middle East are not due to a lack of demand or lack of opportunities, but rather to the side effects of the current political situation. Yemeni and Iranian bitcoins must bear in mind both domestic and international risks.
Even countries such as Lebanon and Palestine, which are not under sanctions, are still out of the reach of Fintech companies. For this reason, limited comprehensive and transparent information is available outside of the legalization of digital currency exchanges.
This has led to various estimates of local crypto markets. However, even the recent market downturn does not appear to have reduced demand in local markets and off-exchange transactions. Institutional investors and big market players who endorse Bitcoin’s endowment are probably unaware of the strong demand in the Middle East for bitcoin. Because lower prices provide an opportunity for shoppers in emerging markets in the region.
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