Although quantifying demand for Bitcoin (BTC) in informal markets across the Middle East is difficult, small-scale traders from Lebanon to Yemen say interest in Bitcoin as a safe-haven asset is stronger than ever before, not a speculative asset.
Rami Mohammad Ali, a bitcoin miner and trader based in East Jerusalem, said the selling side of the local peer-to-peer market was drying up and the buy side was bursting into March.
He has sold a cumulative total of 30 bitcoin to 90 clients so far. That’s a significant increase from September 2019, when he said he was selling approximately 20 bitcoin a month to 50 clients.
The appeal of holding value in bitcoin, he said, is that people can access “the money any time they need it.”
In another part of the region, an anonymous Syrian family trader in Lebanon has said that small Lebanese business owners are struggling to pay their invoices abroad. So among the few Lebanese with family abroad and the necessary computer skills, some are now “buy bitcoin locally with cash and liquidate it abroad through friends and family to pay their invoices.”
Indeed, as global prices dip, some Middle Eastern bitcoin traders reported relative newbies are learning fast and looking to buy bitcoin this week.
Meanwhile an Iranian bitcoiner in Tehran said people now tend to keep their assets in gold, dollars, and housing, plus a bitcoin. In spite of the challenges faced by industrial operations, small-scale bitcoin mining is now commonplace, say locals.
“Bitcoin is a revolutionary product but it needs a few more revolutions,” the Tehran-based bitcoiner said. “In the past, people thought bitcoin was a new type of scam. Now bitcoin is more trusted.”
Cryptocurrency Value is Based on Decentralization and Resistance to Censorship
Yemeni bitcoin trader Mohammed Alsobhi said about five civilians go on buying a small amount of bitcoin every month. Due to the widespread censorship of telecommunication networks, the bitcoin market in Yemen is much smaller and quieter than the majority in the region. But there’s interest in computer science among locals
“If I had the capabilities available in developed countries, I would have made great progress in this field,” Alsobhi said of selling bitcoin in his war-torn nation. “Most companies that deal globally … are excluding Yemen.”
Ben Freeman, a former Goldman Sachs oil trader and CEO of Creo Commodities, said the value of cryptocurrency in the region is based on being decentralized and resistant to censorship. He does not believe that the current volatility of Bitcoin has any impact on that value proposition, especially given the risk presented by the civil war in Yemen for the production of Saudi Arabian oil.
“Extreme market sell-offs generally hit most asset classes as assets are sold to generate collateral for losing positions,” Freeman said. “If institutions break down, and bitcoin is independent to any institution or government oversight, then we’ll start to see more flight to bitcoin as an asset class.”