The cryptocurrency launched by the Government of Venezuela, Petro, hangs by a thread with the imminent drop in the price of oil.
Despite the fact that President Nicolas Maduro assured that the project was strong, and with possibilities of generating profits for those who invested in it, the current situation continues to undermine its credibility.
How is the Petro price calculated?
The Petro cryptocurrency is supported through the physical reserves of raw materials belonging to the Venezuelan state, which include Gold, Diamond, Iron and Oil. It is for this reason that we are interested in studying the behavior of the Petro price in the face of oil changes.
For this reason, the price of the Petro is obtained from the prices of these commodities, and in the following proportion:
- 50% Oil
- 20% Iron
- 20% Gold
- 10% Diamond
Venezuela is the country with the largest oil reserves in the world, with more than 360,000 million barrels.
Initially, Nicolás Maduro backed Petro’s first issue with 5 billion of those reserves, later adding gold, coltan and diamond fields. At that time, the Petro was quoted around USD 60, ensuring that each unit had a contract to buy 1 barrel of oil from the Venezuelan basket of crude oil, or any other commodity that the government decided so.
Oil prices fell, what happened to the currency?
Apparently, there is no reason for the Central Bank of Venezuela to publish a price for Petro of USD 58.9.
Despite the fact that the price of the cryptocurrency is not exclusively anchored to the price of oil, 50% is, according to the White Paper of the same.
With this proportion to calculate its price, the Petro should be falling along with the crude.
Today the West Texas Intermediate reached USD 0, the reference price for the oil market in the United States. Also, WTI Futures in negative territory, with a low around $ 40.
The oil basket of OPEC member countries was around USD 17 3 days ago.
The price of Venezuelan crude was estimated to be around USD 8 with the dramatic fall of the WTI to USD 15. Although, in this forecast the fall to USD 0 is not taken into account yet.
Despite the terrible situation for the oil market, the official Petro calculator shows a price of USD 58.9 for today, while one of USD 50.1 is indicated on the home platform, both prices practically unused , for the almost null acceptance of the cryptocurrency by commercial establishments.
In the exchanges endorsed by the Superintendency of Cryptocurrencies in Venezuela, a price more in line with reality is shown. At AntwerpCoin the price of the Petro today is USD 10.7, close to the one traded in Crypto at USD 10.3.
What do you think? Will the official price of the Petro also fall? Let us know your point of view in the comments!