Iranian Currency Approaching Toilet Paper Status

In one month, the Iranian rial has lost 15% of its value on concerns over the ability of the government to maintain economic stability in the face of sanctions. By March of 2012, it is anticipated that the annual inflation rate in Iran will have hit 21.6%.

Iranians are rushing to convert their rials to gold or US dollars.

There are, however, at least eight Iranians currently sitting comfortably at home, counting their Bitcoins (this number represents currently-connected users of the standard client):

Read more »

Mt.Gox Foreign Currency Markets

In case some of you do not understand how Mt.Gox's foreign currency markets work, I will provide a brief explanation.

On September 2nd, Mt.Gox announced the opening of 15 new currency markets:

EUR - Euro
CAD - Canadian Dollar
GBP - British Pound
CHF - Swiss Francs
RUB - Russian Rubles
AUD - Australian Dollars
SEK - Swedish Krona
DKK - Danish Krona
HKD - Hong Kong Dollars
PLN - Polish Zloty
CNY - Chinese Yuan
SGD - Singapore Dollars
THB - Thai Baht
NZD - New Zealand Dollars
JPY - Japanese Yen

What should be clarified, however, is that you do not always trade on a separate market, unless there are Bitcoins already available for sale in your currency. Instead, when you trade in a currency other than USD, you are more than likely still trading on the USD market, except there is a premium added to the asking price.

Example:

The current USD/CAD exchange rate is 1.029 (Yahoo Finance). The Mt.Gox lowest ask is 3.92 USD, which should be 4.03 CAD when converted at the going exchange rate, but the lowest ask on the Mt.Gox CAD market is actually 4.19 CAD, which is 4% higher. On average, when I've traded on the Mt.Gox CAD market, I've paid 2.5% more than what would be expected from converting the USD market rate to CAD. That 2.5% fee turns out to be exactly the same fee you would pay for converting your currency to USD in the first place.

I hope that makes things a little clearer for any of you looking to buy Bitcoin with a non-USD currency on Mt.Gox.

Read more »