Categories: Bitcoin Business

Fight or Flight? How Laws and a Lack of Trust Affect Bitcoin Trading

Click here to view original web page at

Legal clampdowns are proving effective at preventing the use of crypto. But what appears to be a key driver of the peer-to-peer, decentralized use of bitcoin is a lack of trust in fiat currencies. A comparison between bitcoin trading, in volume, shows that the lack of trust in fiat drives crypto adoption, whereas laws against it drive people away… usually.

Also read: A Scrum, The Lightning Network, and the Return of the Maximalist

We love hearing from our readers. Sound off on our Twitter or Facebook pages
Check out our insights & interviews with influential insiders on the Bitsonline YouTube channel
And for the only source of UNFILTERED trading volume, head to CoinBillboard

Though Widely Restricted and Unregulated, Bitcoin is Specifically Illegal in Ten Countries

Bitcoin is illegal in Algeria, Bangladesh, Pakistan, Afghanistan, Bolivia, Vietnam, Qatar, Saudi Arabia, Macedonia, and Vanuatu. Half of those countries follow varying degrees of strict interpretations of the Q’uran, with Bangladesh standing out as a more liberal Islamic country. Qatar is majority Sunni, but the ruling class are Shi’a. Shariah-compliance complications may play a big part in the relative prominence of Muslim-majority countries in this list.

Bitcoin’s illegal status in those countries has had a significant impact on the amount of trading. While crypto trade is healthy where its use is restricted, there is very little action on localbitcoins in Bolivia, Algeria, and Bangladesh.

Among those countries for which has localbitcoins aggregated data, Vietnamese and Saudi Arabian anti-bitcoin laws appear to be working, with trading levels being fairly low. (It must be noted that these charts are denominated in respective local currencies, not bitcoin.)

But Pakistan’s laws aren’t working so well.

Where a Lack of Trust Provokes a Flight to Bitcoin

On the other hand, in countries where hyperinflation is currently rampant–Venezuela and Argentina–bitcoin trading is incredibly active.

In other countries in Latin America where intermittent experiences with hyperinflation are common and/or relatively recent, peer-to-peer bitcoin trading volumes are also high.

Brazil is perhaps an exception here, with volume fairly low despite its own problems in the past with hyperinflation.

So What Sets Pakistan Apart?

According to Trading Economics, Pakistan’s inflation rate has grown to around seven percent, doubling in a year. In some areas of consumer goods, it is approaching 15 percent. That is hardly hyperinflation, but double-digit rates of annual price growth in transport and education suggest difficulties for a country with such extreme poverty.

Pakistan also has a history of substantial inflation–in 1973 it breached 37 percent. Equally as significantly, its record low was minus 10 percent in 1959. Pakistanis have had a history of monetary instability.

It is a reasonable conclusion to make, then, that just as Chile and Colombia lack inflationary pressures at the moment, their past collisions with them have created an ingrained lack of faith in their respective governments’ ability to manage money supply–and the same may be true of Pakistan.

Fight Or Flight?

What this data suggests overall is that the human capacity toward flight is stronger than it is toward fight. This is particularly the case in countries where punishments for breaking the law are notoriously strict, such as in Saudi Arabia and Afghanistan.

But Bolivia remains the anomaly here. It does not have a reputation for severe punishments for criminal activity, but it does have a history of battles with hyperinflation. For fifty years, from 1968 to 2018, it battled average annual inflation levels over 250 percent. (Though those figures are skewed by spikes in the mid-80’s).

Bolivia appears to be neither a fight or flight country; whereas Pakistan is both. Perhaps Bolivians are simply enjoying the relative stability of the economy under the socialist rule of Evo Morales since 2006.

Have your say. What is more powerful a factor for you? Are you more fearful of a harsh government or does a lack of trust in monetary policy concern you more?

Images via Coin Dance, Pixabay


Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Published by

Recent Posts

Terrorists are turning to Bitcoin for funding, and they’re learning fast

Representational image of Bitcoin. (File: Bloomberg) By Nathaniel Popper Hamas, the militant Palestinian group, has been designated a terrorist organization… Read More

23 mins ago

Latest Faketoshi says he conveniently ‘lost the hard drive’ containing billions in Bitcoin

Just yesterday we told you how there was a new Faketoshi in town, staking a questionable claim to the Bitcoin… Read More

23 mins ago

Study Suggests Scarcity Could Drive Bitcoin Prices to $60,000 by May 2020

Share Tweet Send Share Bitcoin price predictions have been coming thick and fast in recent months as the world’s top… Read More

23 mins ago

“Bitcoin will never hit 50k” says crypto skeptic Peter Schiff

For a man that wants nothing to do with Bitcoin , economist and Euro Pacific Capital CEO Peter Schiff never… Read More

23 mins ago

Casa Releases Node Monitor Service to Improve Bitcoin Network Health

Casa, a crypto firm that provides a private key management service and Bitcoin node machine, has unveiled a node monitor… Read More

24 mins ago

ETC/ETH Technical Analysis: Ethereum Classic breaks higher

Ethereum Classic vs Ethereum: Classic is making a comeback today An important price level has been broken 0.037673 looks to… Read More

24 mins ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More