Venezuela’s digital currency, Petro, seems to be a stable digital currency that should support oil and other staples. But among traders, the reality is something else. Petro prices did not fall with the fall in oil prices!
Six days ago, March 9, which became known as “Black Monday”, all the financial markets of the world experienced a sharp crash, but for a country like Venezuela that put all its eggs in one basket and Its income largely depends on oil, and the situation is worse.
It relies almost exclusively on oil exports to feed its more than 30 million population. The government, headed by Nicolas Maduro, seeks to save Venezuela’s injured economy by developing and expanding its official digital currency, Petro. But since Petro is backed by oil, has the value of this digital currency fallen with the fall in oil prices?
On March 9, almost every market that forms part of the wheel of the world economy suffered heavy losses. The price of US light crude fell from $ 46 to $ 27.5 on that day, and Brent crude oil fell from $ 50 to $ 30 in a flick.
World commodity markets (except for gold) and stock markets also touched new highs amid fears of a deadly coronavirus outbreak and the Saudi-Russian trade war.
This downtrend also overshadowed the digital currency market.
But in Venezuela, Petro’s controversial digital currency, which the president says is backed by oil and other commodities, was not affected by the fall in the price of its backing assets. Why?
First of all, take a look at the official Petro price. The Petro calculator site created by the Venezuelan government shows this token to be very stable. But the $60 price tag of each token on this site represents a stark contrast to market realities: the price of a barrel of oil is about half that.
Even if we take into account the price of other items in a Petro’s basket, the price of $ 60 per token is still far from reality.
However, in fact the price this calculator says is the least important thing in determining the true price of a petro, since no one outside the government uses the digital currency.
Petro prices in the informal markets have always been much lower and more lucrative than the official price, contrary to the government’s claim that the digital currency is stable.
On the Amberes native trading platform, the Petro / Euro pair shows that the price of Petro has fallen by about $ 2 from March 9 to March 10 and has risen from € 32 to € 30, a figure that Petro has been trading this year. It has reached it many times. So at best, Petro is just a little bit stable.
On the Ambers platform, the Petro / Bitcoin (with the highest volume of trading) trading pair shows that the price of Petro has fallen slightly from just 0.0025 Bitcoin to 0.0024 Bitcoin. However, the price of this token against Bolivar has fallen by more than 10%, which, although closer to the truth, is still far from the true performance of the oil market.
At the same time, in the Cryptia exchanger, the price of Petro is 0.0046 Bitcoin. However, the trading volume of this exchange is close to zero.
All this evidence tells us that traders do not regard Petro as a stable digital currency and no one trades it at the official government rate.
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