After the presidential elections in Zimbabwe in June 2024, the Zimbabwean dollar (ZWL) fell sharply. This event was accompanied by 800% inflation, which created a unique opportunity for investors specializing in cryptocurrency arbitrage to receive additional income.
According to the cryptocurrency arbitration provider Currency Hub, the gross premium for cryptocurrency arbitration on local and foreign exchanges increased from 1% to 4.5% during the month. Andrew Ludwig, CEO of Currency Hub, commented on the situation:
"In the last few months, all attention has been paid to the movement of the national currency and electoral activity — two key factors affecting the volatility of the ZWL. In June, the gross premium exceeded our expectations, rising above 4.5% and averaging more than 2% with stable profits above 1.6%."
The head of the Currency Hub noted that there is an inverse correlation between the exchange rate of fiat currencies and the cryptocurrency arbitrage spread. In other words, with the growth of the USD-ZWL exchange rate, the gross profit in cryptocurrency arbitration also increases. Against this background, the average arbitrage spread for popular cryptocurrency pairs in Zimbabwe in the second quarter of 2024 could range from 5% to 10%.
According to Bloomberg, the Zimbabwean authorities have begun to develop regulation of the local crypto industry. The collection of data on virtual assets will last until June 26, 2024.