Bitcoin Hits Record Value Against World's Most Inflationary Currencies Amid Mixed Government Responses
Summary:
Over October 23-24, Bitcoin (BTC) attained record highs against several global heavily inflationary currencies, including the Argentine peso, Nigerian naira, and Turkish lira. Despite this, it is notable that this is primarily driven by ongoing currency devaluations, as well as Bitcoin's 16% price surge. Countries like Nigeria, Turkey, and Argentina are increasingly adopting cryptocurrencies, demonstrating mixed governmental stances towards the industry. The upcoming presidential elections in Argentina could particularly influence its ongoing financial crisis.
In the span of 30 hours from October 23 to 24, Bitcoin (BTC) reached record values when converted to several highly inflationary currencies around the globe. These include the Argentine peso, Nigerian naira, Turkish lira, Laotian kip, and Egyptian pound. It is essential to note, however, that this milestone is a reflection of the continuous depreciation of these currencies, fueled by Bitcoin's recent upswing by 16%.
As of October 24 and 25, the naira and lira witnessed unprecedented lows against the U.S. dollar, whereas the peso hovers just 0.85% below its all-time depths versus the dollar. Data from the International Monetary Fund reveals that the Venezuelan bolivar, with its unsettling 360% annual inflation rate, tops the list. It is closely trailed by the Zimbabwean dollar at 314%, the Sudanese pound at 256%, and the Argentine oesi at 122%. The Turkish lira and Nigerian naira rank sixth and fifteenth, with annual inflation percentages of 51% and 25%, respectively.
Cryptocurrency advocates argue that digital assets—including Bitcoin and stablecoins—are effective shields against soaring inflation, a belief that these recent statistics could further fortify. Nigeria, Turkey, and Argentina, stand second, twelfth, and fifteenth respectively, globally, in cryptocurrency adoption rates, an insight from a report by Chainalysis on September 12.
Governments of these nations, however, have demonstrated a mixed stance towards the crypto world. Despite the Central Bank of Nigeria's ban in February 2021 on local banks providing services to crypto exchanges, the nation is gradually warming up to cryptocurrencies. In December 2022, Nigeria declared plans to endorse a bill recognizing cryptocurrencies as "investment capital," attributing its change in stance to its commitment to aligning with "global practices."
Turkey, with its enthusiastic community of crypto enthusiasts, prohibited using cryptocurrencies for goods and services in April 2021. The country is developing its own central bank digital currency (CBDC) to digitize the Turkish lira.
In Argentina, the upcoming November presidential elections could influence the handling of its ongoing financial crisis. Contenders for the presidency, Javier Milei and Sergi Massa, will compete in a final run-off vote on November 19. Massa, presently Argentina's economy minister, advocates for the swift introduction of a CBDC to tackle the persistent inflation issues plaguing the nation. He also discourages dependence on the U.S. dollar and urges citizens to rally behind the Argentine peso. In contrast, Milei supports the inclusion of the U.S. dollar and the liquidation of Argentina's central bank.
Published At
10/27/2023 5:01:00 AM
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