- October 29, 2023
- Posted by: [email protected]
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Bitcoin (BTC) has achieved remarkable all-time highs when measured against the currencies of nations grappling with severe inflation. Over a span of just 30 hours, from October 23 to 24, Bitcoin soared to unprecedented levels when exchanged for the Argentine peso, Nigerian naira, Turkish lira, Laotian kip, and the Egyptian pound. These striking highs are a direct consequence of ongoing currency devaluation, intensified by Bitcoin’s recent 16% surge in value.
Notably, the Nigerian naira and Turkish lira plummeted to their lowest points in relation to the United States dollar on October 24 and 25, highlighting the deteriorating state of these fiat currencies. Similarly, the Argentine peso stands just 0.85% away from its all-time low against the U.S. dollar, signifying the ongoing economic challenges faced by the country.
According to International Monetary Fund (IMF) data, Venezuela’s bolivar currently holds the highest annual inflation rate at a staggering 360%, followed closely by the Zimbabwean dollar at 314%, the Sudanese pound at 256%, and the Argentine peso at 122%. The Turkish lira and Nigerian naira, while not topping the list, still suffer from substantial annual inflation rates of 51% and 25%, respectively, further underlining the dire state of these economies.
Cryptocurrency enthusiasts have long regarded digital assets like Bitcoin and stablecoins as a refuge from soaring inflation rates, and the recent data serves to reinforce this narrative. Nigeria, Turkey, and Argentina rank second, 12th, and 15th globally for cryptocurrency adoption, as reported by a September 12 study by Chainalysis. Despite their high levels of crypto engagement, these countries have experienced regulatory tensions in the past.
Nigeria, for instance, initially imposed a ban on local banks providing services to cryptocurrency exchanges in February 2021. However, progress has been made since December 2022, with Nigeria’s intention to recognize cryptocurrencies as “capital for investment,” aligning with global practices and signaling a shift in the country’s stance towards cryptocurrencies.
Turkey, known for its growing interest in cryptocurrency, banned crypto payments for goods and services in April 2021 and has been actively working on a central bank digital currency (CBDC) to digitize the Turkish lira.
Meanwhile, in Argentina, the impending presidential election in November is seen as a potential influence on the nation’s inflation crisis. Presidential candidate Javier Milei, in a run-off vote against competitor Sergi Massa, is seeking to address the country’s long-standing inflation woes. Massa, the current Minister of Economy, is advocating for the swift launch of a CBDC to combat inflation and urging citizens to rally behind the Argentine peso. In contrast, Milei supports the adoption of the U.S. dollar alongside the abolishment of Argentina’s central bank, setting the stage for critical economic decisions in the near future.
