Bitcoin became equal to gold Thursday as a future Venezuela sell-off may have influenced the precious metal’s 10 percent drop in value.
Exchanges indicate approximate bothassets are now worth approximately $1,238.
The parity comes amid news that Venezuela’s national reserves are down to $10 bln, of which $7.7 bln is held as gold.
Having previously shipped gold to Switzerland to repay its debts, commentators are assuming a repeat performance in 2017 as the country struggles to pay off $7.2 bln in outstanding payments.
A multi-billion dollar sell-off would flood the gold market, creating a lower purchase price and accelerating the depletion of Venezuela’s reserves even further.
With inflation expected to hit 1660 percent this year and 2880 percent in 2018, an end game of default or IMF intervention appears inevitable.
"The question is: Where is the floor?” CNN quotes Siobhan Morden, head of Latin America fixed-income strategy at Nomura Holdings.
“If oil prices stagnate and foreign reserves reach zero, then the clock is going to start on a default.”
Meanwhile, having adopted an unpredictable attitude to Bitcoin, Venezuela is allowing the country’s only major exchange to recommence operations after its bank cut off its accounts.
SurBitcoin announced last week that it should be back in business during the first week of March, while at the same time spurious reports of the exchange adding bolivar/dollar pairs have been surfacing on Reddit.
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