Bitcoin Surges in Countries Facing Currency Devaluation
In countries like Nigeria and Turkey, where extreme currency devaluation and political uncertainty prevail, Bitcoin is trading at a premium. These nations are experiencing skyrocketing inflation rates, prompting residents to seek refuge in the leading cryptocurrency.
Bitcoin Hits New High in Multiple Countries
The value of Bitcoin has reached new all-time highs (ATH) in Nigeria, Turkey, and Argentina. The fiat currencies of these countries, namely the Nigerian naira, Argentine peso, and Turkish lira, continue to plummet.
Bitcoin has soared to 28.4 million Nigerian naira (NGN), 12.4 million Argentine pesos (ARS), and 979,000 Turkish lira (TRY).
High Inflation Rates Drive Bitcoin Adoption
According to data from the International Monetary Fund (IMF), Argentina is grappling with triple-digit inflation. The Argentine peso ranks fourth among currencies with the highest annual inflation rates.
The Turkish lira and Nigerian naira occupy the 6th and 15th positions, with inflation rates surging by 25% and 52% respectively over the past year. As the purchasing power of these currencies continues to decline rapidly, the demand for Bitcoin as a hedge against inflation has significantly increased.
Rising Crypto Adoption in Inflation-Stricken Nations
Nigeria, Turkey, and Argentina have witnessed a growing adoption of cryptocurrencies despite regulatory restrictions. Chainalysis reported that Nigeria is the second most active country in terms of crypto trading.
In Nigeria, despite a government ban on crypto trading imposed this year, trading volumes have remained substantial. Crypto transactions in the country have increased by 9% year-on-year, totaling 56.7 billion as of June 2023.
The Nigerian government is also becoming more open to cryptocurrencies as their usage becomes more prevalent. In December 2022, plans were announced to legalize Bitcoin through a bill.
Turkey and Argentina are also embracing this adoption trend, ranking 12th and 15th respectively on Chainalysis’ list. Approximately 10% of the Turkish population is turning to Bitcoin to safeguard their funds from the detrimental effects of lira inflation.
In Argentina, Bitcoin has become a prominent topic of discussion, with politicians leveraging its popularity to gain support ahead of the presidential election.
After the Bitcoin-friendly candidate Javier Milei won the presidential primary elections, Bitcoin reached an ATH against the Argentine peso in August.
Hot Take: Bitcoin’s Rise Amidst Economic Turmoil
Bitcoin’s surge in countries facing extreme currency devaluation and high inflation rates demonstrates its status as a safe haven asset. Nigeria, Turkey, and Argentina have experienced significant economic challenges, driving residents towards Bitcoin as a means of preserving wealth. Despite regulatory restrictions, these nations have seen an increase in crypto adoption as people seek financial stability amidst uncertain times. The demand for Bitcoin is expected to continue growing in such inflation-stricken countries as individuals look for alternative stores of value. As economic conditions persist, cryptocurrencies like Bitcoin provide a pathway for individuals to protect their funds and navigate through turbulent financial landscapes.
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