P2P markets are having a surge globally caused by the African and Latin American markets peaking at all-time highest volumes.
The total volume of peer-to-peer (P2P) Bitcoin trading volumes has increased to new all-time highs since January of 2018. The statistics show that almost $95 million worth of Bitcoin (BTC) has been traded on Localbitcoins and Paxful during just the first week of August. These events are closely tied to the surge of interest in Latin America and Africa where most of these bitcoins have been traded. In Latin American countries like Chile, Honduras, Bolivia, Paraguay, Uruguay, and the Bahamas are all showing record-high numbers of trade volumes since early July. Venezuela in particular has contributed the most to the statistics with over $13 million in weekly P2P trades closely followed with $5 million per week for the next two weeks.
It is worth noting that Columbia is the second biggest and strongest market in Latin America with trade volume hitting $3 million, then followed by Peru and Argentina with $1 million volume per week. Latin America is falling just $1 million short to set up a new all-time highest traded regional P2P trade volume.
How Volume Affects Exchange Rate?
In general, there are a couple of things impacting the exchange rates. These are circulating supply, market capitalization, and trading volume. The latter is one of the most prominent indicators in the crypto world. The importance of this metric comes from the added benefit of being able to show which way the coin is going to swing. All of these currencies, crypto or otherwise, have similarities between each other. This is why a lot of people switch between trading on the foreign exchange market (Forex, FX) and cryptocurrencies. Although with the latter the volatility is much higher therefore it gives the ability to make more money through trades even though it is much risker at the same time. This is why a lot of brokers like Axiory, for example, give demo accounts to their new users for them to learn the strings of the market before they actually start investing real money into their trades. The traded volume can easily be used to determine the best days to trade forex due to the fact that if there are higher volumes being traded it means that there are more people backing the movements and thus the price, as a rule of thumb, is going to increase due to the demand. The same system works for bitcoin (BTC). If the price drops but there’s a minimal volume being traded it means that there are only a small portion of people who are backing up the trend. Due to this, the volume is arguably one of the most important factors when the investor is making a decision to open or close trades.
There are a number of ways to break down the traded volume. It gives a clear direction to infer where the market movement is going to be going. Depending on the scale and the type of a trader you are different statistics are going to matter the most. For example, traded volume can be broken down into just last minute, an hour, 24 hours, a week, or 30 days. This helps traders determine if the latest movements are an aberration or a part of normality. A cryptocurrency with high movement and high volume will not attract much attention. Otherwise, if this very same coin has, normally, less volume and starts being heavily traded during the last 24 hours it may indicate that there is some support form the community behind the movement.
African P2P market
Much like Latin America, which was discussed above in the article, African peer-to-peer trade has also started rallying. The sub-Saharan region has been breaking new records almost every week during the last 2.5 months.
Nigeria is the biggest fish in the fish tank. This is represented by almost $18 million weekly volume. The South African, Ghanan, Kenyan, Botswanian, Zambian, and Sudanian markets have also broken new records during the last weeks. Kenya is the second biggest market for P2P bitcoin trade in Africa with weekly $3.6 million in trades closely followed by Ghana and South Africa with $2 million traded P2P volume of Bitcoin per week.