The spreads appear to be fuelled by an extreme disparity between the market value and official peg of 1,507 lira per U.S. dollar.
With Lebanon’s currency hitting new record lows of 4,000 Lebanese lira (LBP) per $1, chaotic prices are being listed by Lebanese Localbitcoins traders.
As of this writing, spreads between listings on both sides of the order book appear to exceed 90%, leading to reports claiming that Bitcoin (BTC) is trading for $15,000 in Lebanon.
As such, BTC appears to be trading for a more modest 5% premium at $7,850.
Lebanon’s currency plummets to all-time lows
Lebanon’s currency crisis is severely escalating, with market prices reportedly dropping from 3,000 lira per $1 roughly two weeks ago, to 3,800 lira per U.S. dollar on April 21, down to 4,000 per dollar on April 24.
The country’s central bank, Banque du Liban, has reportedly racked up $40 billion in debt, including $3 billion in the past three weeks and $7 billion this year overall.
The crippling economic crisis has seen protestors defying COVID-19 lockdown measures to take to the streets in protest. Riot police donning surgical masks were deployed yesterday when hundreds of protesters gathered at the central bank’s headquarters and began vandalizing the building.
Lebanon’s prime minister has criticized the central bank governor, asserting that the bank was either the “instigator of the dramatic drop” or “paralyzed” in the face of the lira’s devaluation, stating:
There is a dilemma in the suspicious and mysterious way the central bank governor is dealing with the deterioration of the exchange rate of the Lebanese pound, and that’s causing the collapse.
Currency chaos leads to wild P2P Bitcoin price spreads
Confusion surrounding the value of the lira has resulted in erratic prices listed on popular peer-to-peer Bitcoin marketplace Localbitcoins.
While it appears that Localbitcoins traders are selling BTC for 20 million to 22 million lira – approximately $14,000 to $15,000 using the official exchange rate, most ads on for Lebanese traders stipulate that pricing will be finalized according to the U.S. dollar price.
For example, seller hassannasser currently has a listing on the platform to sell BTC for nearly 12 million lira – equating to $7,850. However, closer inspection shows that despite advertising in lira, the pricing is payment in USD, with their listing indicating that prices for trades made in lira will be privately agreed upon:
Amount to pay in USD is your trade amount divided by 1500 […] When paying in LBP you should pay the USD amount multiplied by the USD rate that we should agree on.