Bitcoin Reaches Record Highs Against Major Inflation-Plagued Currencies
Summary:
Bitcoin's value has hit record highs against several fiat currencies including the Argentine peso, Nigerian naira, Turkish lira, Laotian kip, and Egyptian pound. This surge in Bitcoin's worth is largely attributable to the continuing devaluation of these currencies, further amplified by Bitcoin's recent 16% price increase. The governments of Argentina, Nigeria, and Turkey, despite having high rates of cryptocurrency adoption, have maintained varying stances towards the crypto industry. Countries such as Nigeria are becoming more accepting of digital currencies, while others like Turkey have imposed bans on crypto payments. The long-standing inflation crisis in Argentina could potentially be addressed depending on the results of the upcoming presidential election.
The value of Bitcoin (BTC) has achieved unprecedented records against several of the globe's most inflation-prone traditional currencies. Between the 23rd and 24th of October, the purchase price for a single Bitcoin shot to records in terms of the Argentine peso (ARS), Nigerian naira (NGN), Turkish lira (TRY), Laotian kip (LAK), and Egyptian pound (EGT).
The caveat is that this is a result of continuous currency devaluation, compounded by a recent 16% Bitcoin price surge. The NGN and TRY hit their lowest values compared to the US dollar on October 24 and 25, while the ARS is just 0.85% shy from its lowest-ever standing against the US dollar. The International Monetary Fund reports that the Venezuelan bolivar is topping the charts with an annual inflation rate of 360%, followed by the Zimbabwean dollar (314%), Sudanese pound (256%) and ARS (122%). The Turkish lira and Nigerian naira rank sixth and fifteenth, with yearly inflation rates of 51% and 25%, respectively, according to the IMF data.
Digital assets like Bitcoin and stablecoins have been viewed by crypto enthusiasts as financial shields against rampant inflation, a stance that could be consolidated by the recent numbers. According to data from Chainalysis on September 12, Argentina, Nigeria, and Turkey have the second, twelfth, and fifteenth highest rates of cryptocurrency utilization in the world, respectively.
Despite this, the governments of these nations haven't always been on the same page with the crypto sector. After banning local banks from offering services to crypto exchanges in February 2021, Nigeria is slowly warming up to cryptocurrencies. This change of heart was indicated in December 2022 when the African nation expressed its desire to pass a bill that would consider cryptocurrencies as "investment capital" to align with "global practices".
Turkey, despite having a population highly interested in cryptocurrencies, saw its central bank prohibit crypto payments for goods and services in April 2021. Moreover, the Turkish central bank is developing its own digital currency to digitize the lira.
In Argentina, the ongoing inflation crisis may see changes depending on November's presidential election results. Candidate Javier Milei is set against Sergi Massa in a final run-off vote on November 19. Serving as the nation's minister of economy, Massa aims to introduce a central bank digital currency (CBDC) "as soon as possible" to address Argentina's enduring inflation ordeal.
He is also advocating for isolation from the US dollar, stating that Argentinians should show "patriotism" by supporting the Argentine Peso. Conversely, Milei proposes the addition of the US dollar and the shutdown of Argentina's central bank.
Published At
10/27/2023 5:01:17 AM
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