What impact will the drastic changes in Venezuela have on cryptocurrencies and various assets?
TechFlow Selected TechFlow Selected
What impact will the drastic changes in Venezuela have on cryptocurrencies and various assets?
Geopolitics treats crypto financial infrastructure as weapons and battlefields.
Navigating Web3 tides with focused insightsHello everyone, welcome to 2026. It's been a really long time since our first episode was updated, and we haven't communicated with everyone.
So, for the new year, our plan is to better integrate this blog with our official account. Over the past year, our official account has mainly focused on content about blockchain and cryptocurrencies, and this direction will continue in the new year.
The new year has a very interesting beginning.
Over the weekend, a highly shocking sudden event occurred, and this event is very, very closely related to my previous professional experience. This event, which you probably all know by now: the President of Venezuela was unexpectedly and blitzkrieg-captured by U.S. special forces and taken to the United States. Today, Monday U.S. time, he has also entered court and the trial has begun.
This entire event has a very significant impact on the entire Latin American market, even the international political situation, and financial markets. Because when I was at Franklin Templeton, the market I was responsible for was the Latin American market. Although I wasn't directly responsible for investments in Venezuela, the markets I covered at the time, such as Colombia and Chile, are very, very relevant. For example, Colombia was, in a sense, also affected by this event, which we will discuss in detail later.
This event was very sudden, occurring on January 3rd, early Saturday morning. U.S. Special Forces Delta Force unexpectedly raided Caracas, the capital of Venezuela, and captured President Maduro and his wife.
This operation, codenamed "Absolute Resolve", was launched around 2 a.m. The U.S. military conducted airstrikes on many key targets in Caracas. We can see many images circulating online of U.S. military helicopters flying at low altitudes.
What's very shocking is that no resistance was encountered. Delta Force quickly apprehended the Maduros and transported them out of the country using helicopters and transport aircraft. We can see that Trump also posted a very famous photo on social media: Maduro blindfolded, holding a bottle of Costco water, and wearing Nike clothes. This photo spread across all social media platforms.
First, a "Brief Overview": Why It's Remarkable
Why is it remarkable? There are several points. First, I'll give a brief overview, along with our baseline scenario for this situation and an overall analysis of some tail risks. After that, I will expand and go into detailed specific analysis regarding international politics, U.S. politics, capital markets, and even blockchain, etc.
Overall:
It was not authorized by the United Nations. This unilateral military action is a major subversion of the currently accepted international norms, so it has sparked a huge reaction.
We can see that not only were there casualties among Venezuelan soldiers, but civilians were also casualties. We even know that Venezuela and Cuba have a very close relationship, and many Cuban advisors were also killed in this operation.
Trump actually indicted Maduro on charges of "narcoterrorism" during his first term. After this capture, the main charge he is being tried for today in a U.S. court is also this charge. In the U.S. narrative, this charge is considered a so-called legal action, but everyone knows: narcoterrorism is just a pretext; behind it are actually factors related to energy and crude oil.
This "surgical law enforcement" was very swift, but most countries are actually condemning the military action that was not approved by the Security Council. This also sets a very, very dangerous precedent. You can imagine that the U.S. has the capability for such actions, so no national leader is absolutely safe.
We can see that most U.S. allies have been cautious in their wording and have not directly criticized. But we can see that major powers like China and Russia, as well as Latin American countries like Brazil and Mexico, have all strongly condemned the U.S. for blatantly violating these countries' sovereignty.
We remember the last time the U.S. had such behavior was around 1989 when it invaded Panama. It can be said that since that military operation, this is the most dramatic forceful intervention by the U.S. military in Latin America.
So, especially at a time when the international situation is relatively chaotic, this has caused a very significant shock. Many regimes are beginning to worry: will we be next? The media is talking about, for example, Iran—because Iran has also had a lot of domestic unrest recently.
Including the current tense relations between major powers: will relations between the U.S. and China/Russia become more strained? Actually, an action of this level has already exceeded the scope of so-called "Latin American and American regional news"; it is a global news event. Although recently people have been talking about the U.S. Monroe Doctrine, "America for the Americans," this incident indeed has an international, global impact.
Baseline Scenario: Political Transition Has Begun
Overall, looking at the development of this situation, in my view there is a baseline scenario.
We now see that Venezuela has already begun the process of political transition. After Maduro was captured, Vice President Delcy Rodríguez temporarily took charge in the capital and has received support from the military. Today we see U.S. media reports saying that Rodríguez has already begun cooperating with Washington.
Interestingly, the U.S. did not directly install Venezuela's current opposition into power, but is cooperating with the current Vice President. We can see that the Vice President is a so-called technocrat with relatively good execution capabilities, so serving as a transitional regime is actually a relatively reasonable action.
The subsequent fundamental changes I think are: opening up the oil industry and cracking down on drug smuggling. These are probably the two most important directions.
Today we can see Reuters news: Chevron's operations in Venezuela, which were suspended these past few days, have already begun to resume. There's a photo of a Chevron oil tanker leaving Venezuela. We can see that the oil industry is in a state of relatively smooth transition, and it also shows that the current caretaker government's cooperation with the U.S. is relatively smooth.
Of course, the U.S. military also has the threat of further military strikes, because this blitzkrieg military strike was relatively limited, targeting only some key objectives. The next steps, such as lifting the oil export ban, further opening Venezuela's oil market to more U.S. oil companies, and cooperating with U.S. anti-drug operations, etc., are all likely next steps with a relatively high probability of occurring.
Market Reaction: Betting on "Controllable Risk"
The market reaction also basically reflects this baseline scenario.
For example, oil prices only rose slightly, with Brent crude up about 1.5%–1.6%. The stock market also wasn't greatly affected, rising slightly.
Investors basically judge that although Venezuela's reserves are very, very large, its production, due to limited industrial capacity and not being open to international oil companies, actually accounts for only about 1% of global production, which is very little. With a new government in power and the U.S. relaxing sanctions, Venezuela's crude oil supply may increase, so oil prices haven't risen very high.
This also shows that in the eyes of current investors, this is a situation of very controllable risk: the market may believe the U.S. action will stop here, limited to Venezuela, and may not trigger larger-scale conflicts. Although many countries have already come out saying they are worried about the U.S.'s next steps, we will discuss this in detail later.
Tail Risks: Low Probability, but Truly Dangerous
Besides the baseline risk, there are also tail risks. Although low probability, we can imagine some extreme situations occurring.
If the situation worsens:
First, if China and Russia take asymmetric retaliatory actions—even if not directly confronting the U.S. military, such as launching cyberattacks, supporting proxy states to resist, etc., or using this as an excuse to do similar things to small countries elsewhere. For example, if the U.S. can take action to capture people, then can we also... for example, if Putin really moves to capture Zelenskyy. These things are not completely without probability of happening.
The second, more dangerous one is Iran. If Iran gets involved, Iran's oil production is far higher than Venezuela's. Iran is in a core position in the Middle East, a powder keg that can be ignited at any time. If Iran at this time bands together with Venezuela to oppose the U.S., conflict in the Gulf region could disrupt the Strait of Hormuz, where 20% of global oil transportation passes. Then oil prices wouldn't be a slight 1.5% increase, but could surge, causing a global energy crisis.
Inflation could skyrocket, having a very large impact on economic growth, potentially triggering a global recession—these are all very possible things. If such a black swan occurs, global markets and political situations would be very turbulent.
So the baseline scenario is relatively optimistic, calm, and may even be optimistic for capital markets and crypto markets; but tail risks still exist, and we will continue to monitor.
Crypto: Geopolitics Treats Crypto Financial Infrastructure as Weapons and Battlefields
Besides the macro situation, if we talk about the cryptocurrency ecosystem, we can see: this event demonstrates that geopolitics has already treated crypto financial infrastructure as weapons and battlefields.
Why say that? Because Venezuela's actions in the crypto field in recent years are a very interesting case study in the game between major and minor powers.
Under the consistent heavy pressure of U.S. sanctions, the Maduro regime has actually developed a set of "crypto survival skills" in the cryptocurrency field. For example, using Tether's USDT to bypass U.S. financial sanctions. There are reports that starting from 2024, Venezuela even allowed foreign buyers to use USDT to pay for oil purchases.
Domestically, we know Venezuela's inflation is very bad, import/export controls are strict, and currency is tightly controlled. Many businesses and ordinary people use cryptocurrencies as daily transaction tools, using them to buy daily necessities. We see some data estimating that by 2025, 10% of retail transactions were completed through cryptocurrencies; about 9% of national remittances went through crypto channels.
So, in the cracks of the U.S. financial blockade, cryptocurrency has become a pillar of Venezuela's shadow economy—somewhat similar to Argentina and other countries with severe inflation and currency controls: stablecoins play the role of "dollar substitutes."
Now, since the U.S. is leading the change, we will see: the crypto economy, parallel to the traditional banking system, will face a severe test.
The U.S. began advancing stablecoin legislation last year, the so-called "co-optation," tightening these crypto channels. Through OFAC sanctions, etc., it may add more wallet addresses and currency services related to Venezuela to the blacklist.
If following the U.S. compliant stablecoin route, the issuer has the right to freeze your address; compliant exchanges also dare not touch these funds. Accounts related to Venezuela carry significant risk: once discovered to be related to the Maduro government or sanctioned entities, they may be locked and frozen. We also see that both Tether and Circle have the ability to freeze stablecoin addresses. Exchanges may temporarily ban access from Venezuelan IPs, even freeze local withdrawals, and introduce stricter regulation.
Even the "oil cryptocurrency" Petro issued by the Venezuelan government in 2018 may be more thoroughly delisted/isolated.
For ordinary Venezuelan users, this is not good news. My previous startup, our design team lead lives in Venezuela and has a strong need to receive salaries in stablecoins. If merchants and citizens start using stablecoins for payments, will they worry that the USDT in their hands becomes "black coins," related to the government or sanctioned addresses?
As soon as the news came out, there were rumors that local USDT over-the-counter trading immediately saw discounted selling, like selling USDT at a $0.95 discount—afraid the coins would be locked in wallets. Although this is more speculation, it's enough to illustrate the panic psychology.
If everyone rushes to exchange potentially "tainted" stablecoins for other assets, could it lead to greater demand for Bitcoin, Ethereum, Solana, etc., which don't rely on centralized issuers and can't be frozen at will? Possibly.
So, in the short term, crypto usage in Venezuela may actually decline, but gradually we will see a shift: from freezable stablecoins to more decentralized, non-freezable mainstream cryptocurrencies.
It's also a warning for other emerging markets: Argentina, Nigeria, Kenya, etc., where people use crypto as a tool to hedge against local depreciation and financial instability. In the future, they will be more concerned: can the U.S. use long-arm jurisdiction to freeze stablecoins? Can exchanges freeze accounts at any time? They may shift more towards decentralized coins and decentralized exchanges.
Overall, this event pushes crypto financial pipelines to the forefront of geopolitical games: a greater split in the crypto world may appear—on one side, the "co-opted, cleaned-up" compliant route stablecoins; on the other side, the decentralized, offshore gray crypto asset camp.
Regulation will also continuously intensify, plugging loopholes used by hostile regimes to escape sanctions through crypto. Anti-money laundering, anti-fraud measures will be stricter. Ordinary people will be more worried about traditional finance and centralized crypto, instead relying more on decentralized assets to protect wealth.
Geopolitical Risk for Crypto: A Double-Edged Sword
From the perspective of international order, the impact on crypto is two-way.
On one hand, in the atmosphere of "who will be next," the appeal of decentralized, censorship-resistant assets (like Bitcoin) rises. People in high-risk regimes—the wealthy, high-ranking officials in power—to prevent assets from being frozen by traditional finance, may quietly move wealth from stablecoins to Bitcoin or privacy coins, outside the banking system.
There are indeed rumors that Venezuelan high-level officials have been accumulating Bitcoin shadow reserves in recent years: converting part of oil revenue into cryptocurrency for storage. Information suggests that since 2018, the Maduro regime has amassed up to 600,000 Bitcoins through gold, oil transactions, confiscated mining farms, etc. This number is high and needs confirmation, but it's enough to show that the possibility of Bitcoin as a national wealth shadow vault is not unfounded. Similarly, sanctioned countries like Russia and Iran are also exploring using crypto to bypass the dollar system.
From an investment perspective, investors may think these regions will buy large amounts of BTC/ETH for hedging, thereby pushing up coin prices. Today Bitcoin rose slightly, also showing this way of thinking is partially recognized.
Rising geopolitical risk will increase long-term demand for crypto assets, the "digital gold" story will be repeatedly mentioned—especially when the real world is unsafe.
But on the other hand, short-term geopolitical shocks can also cause crypto markets to suffer. When risk-off mode activates, what investors often sell first are high-risk assets. Historically, when sudden conflicts trigger financial panic, Bitcoin prices often fall sharply along with stocks, not rising like gold.
For example, when the Russia-Ukraine war broke out in 2022 and oil prices surged, Bitcoin experienced a sharp decline. In panic, funds flowed into traditional safe havens like the U.S. dollar, U.S. Treasuries, and gold. The "digital gold" narrative doesn't hold in the initial stages of a crisis—at least initially, Bitcoin behaves more like a high-risk "digital Nasdaq."
So, if the worst tail scenario we mentioned earlier occurs (conflict expands, oil prices surge, etc.), Bitcoin may decline rather than rise.
At the same time, when situations are tense, countries often more strictly control capital flows, preventing capital flight: banning people from buying/selling crypto, stricter VPN controls, etc. Western countries advancing stablecoin legislation will also be more vigilant about hostile countries using crypto for fundraising or money laundering, freezing addresses at the slightest sign of trouble.
This is not good for gradually formalizing crypto businesses: compliant exchanges, wallet service providers are forced to strengthen monitoring, compliance costs rise, user experience worsens. Industry development will be slowed down.
Overall, when the international order is subverted, crypto will show a contradictory double-edged sword effect: on one hand strengthening the "safe haven tool" narrative, on the other hand giving countries more reasons to weaponize the financial system and strictly control crypto channels.
Sanctions and Compliance: The U.S. Will "Plug Leaks," Crypto is a Key Part
This event highlights the core status of sanctions in U.S. strategy, while also exposing the loopholes in traditional sanctions. The U.S. will take this opportunity to mend the fence, and the crypto field is precisely the relatively neglected part before.
For a long time, the U.S. has imposed severe economic sanctions on Venezuela, Iran, Russia, etc., and these regimes have racked their brains to evade them. Taking Venezuela as an example, the Maduro government has managed to survive until now largely by exploiting loopholes in the sanction system, and cryptocurrency is one of the key leaks.
After Maduro's arrest, the U.S. will extract a large amount of internal intelligence to study: how he maintained financial resources under sanctions. This will drive the U.S. to strengthen sanctions on cryptocurrency.
Not surprisingly, they will find a lot of evidence: how Venezuelan officials or front companies used crypto and stablecoin transactions; how PDVSA used USDT to bypass banking supervision; how brokers helped companies convert bolivars to USDT for import purchases; who the counterparties were, what the channels were. Then the U.S. will plug these leaks one by one.
Next we may see: the OFAC sanctions list gradually expands, adding a batch of crypto wallet addresses related to Venezuela, even linking addresses related to Iran and other countries. More wallets will be frozen—especially government officials, related institution wallets, and addresses involved in illegal oil trade.
In plugging leaks, dollar stablecoins will become more prominent: the U.S. will pressure stablecoin issuers to do geo-fencing or more targeted freezing, restricting Venezuelan users and offshore accounts from using them, freezing addresses related to crime.
Once this happens, large treasury USDT being passively affected would be a big blow. Black market USDT liquidity would plummet, the USDT in ordinary people's hands would split into "clean" and "dirty." Clean ones are coins not related to sanctioned funds; dirty coins would cause panic, discounted selling, reduced trading. Even "one coin, two prices" may appear: USDT being sold at a large discount locally, people's purchasing power greatly reduced.
This "clean/dirty" split may not just stay within stablecoins, but also permeate DeFi and offshore exchanges: platforms will strengthen geographical and address restrictions, unwilling to serve blacklisted users to avoid U.S. trouble.
More difficult to handle is: if DeFi liquidity pools mix in funds that have touched sanctioned addresses, they become "dead money" that can't be withdrawn, affecting pool exchange rates, and protocol governance also has headaches. Will DeFi protocols refuse to accept collateral from certain addresses? How to determine if related to sanctioned entities? Should assets be frozen? All these create conflict between ideal "decentralized governance" and real-world compliance.
Many DeFi project core teams fear lawsuits and may ultimately compromise with compliance for self-preservation. If major DeFi protocols all add compliance filtering, the DeFi ecosystem will see a split between "clean DeFi" and "underground DeFi": the compliant side sees institutional funds entering, but privacy and borderless beliefs fade; the underground side insists on anti-censorship principles, but scale may shrink, existing in "guerrilla" form.
Regardless, for global crypto companies, compliance costs will rise significantly: more resources invested in monitoring on-chain activities, cooperating with investigations. On-chain monitoring and data analysis companies may benefit; small companies can't afford it, some small projects exit. Industry concentration rises, innovation slows, decentralized ideals are violated.
In summary, in the dimension of compliance and sanctions, this event has a profound impact on the crypto ecosystem. Venezuela as an example of a sanctions loophole, this loophole will be gradually tightened by the U.S. The crypto field may usher in a round of "purge": cleaning up parts used by authoritarian regimes, short-term turbulence, liquidity contraction; long-term forming a new form—the clean end more integrated into mainstream finance, the non-compliant end hidden in gray areas. Ordinary users need to be more careful: accidentally stepping on a landmine, assets may be frozen or transactions restricted.
Unfortunately, in the context of great power games, "Code is law" has to give way: real law is still state power. The crypto world will be reshaped by the heavy weight of the real world.
Energy: Short-Term Mild, Long-Term May Lower Oil Prices (Baseline Scenario)
Now let's talk about the elephant in the room: oil and natural gas. Venezuela is, after all, the country with the world's largest oil reserves. Although its production in recent years accounts for less than 1% of the global total, the regime's drastic change has a profound impact on oil, gas, and even shipping.
Short-term, the market perceives the crisis as small: Brent rose slightly by 1.5%, investors aren't too worried about supply disruption. Chevron oil tankers leaving Venezuela, various signs show: low risk of oil field shutdowns, port blockades. Production isn't damaged; instead, many people think that after the regime change, the U.S. may lift the ban on Venezuelan oil, opening it up to more companies (U.S./European) for investment in extraction and refining, future supply increases, oil prices won't surge.
Unless worse situations occur: the caretaker government can't control remnants, "scorched earth policy" appears—blowing up refineries, damaging pipelines, etc. Repairing these facilities takes time, would substantially impact the oil market. Or military conflict interferes with oil tanker transport, then it would form a big contrast with the baseline scenario.
Mid-to-long-term baseline: if transition succeeds, U.S. lifts some sanctions, international oil companies return to invest, production rises, global supply increases, actually putting downward pressure on oil prices. But this is an ideal situation, requiring stability and time (maybe two or three years to see effects).
Based on short-term and mid-to-long-term judgment: oil prices rise slightly short-term, decline long-term, friendly to inflation; central banks have more room for easing, friendly to risk assets.
Gold, Silver & Volatility: Safe Haven Bought, But No Panic
Major geopolitical events trigger investors' instinctive reactions: first, rushing into gold, silver, U.S. Treasuries; second, uncertainty pushes up volatility.
This time is no exception: gold rose significantly, while stocks also rose (not sharply). On one side safe haven assets rise, on the other side risk assets also rise, because investors believe the crisis has limited impact on the global economy, it's just a local event, not hindering overall risk appetite.
VIX didn't rise much, still in the teens; crude oil volatility index also rose moderately. That is to say: a few people are cautious, but most are still relatively optimistic.
Macro: Baseline Almost Unaffected; Tail Would Sharply Deteriorate
Now systematically梳理 macro: interest rates, dollar strength/weakness, emerging market credit risk, global liquidity.
Macro background early 2026: central banks raised rates to combat inflation, now inflation easing, growth weak, monetary policy near an inflection point—rates either maintained high or starting to decline, Fed rate cuts are evidence.
Will the Latin American event change the macro picture? Under the baseline scenario, almost unaffected, even more easing: situation stable, new government cooperative, transition smooth, U.S. relaxes sanctions, one less uncertainty factor globally
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
