The Price of Bitcoin Reaches All-Time Highs Against Inflationary Fiat Currencies
The price of Bitcoin (BTC) has recently reached new all-time highs against several inflationary fiat currencies. Over a period of 30 hours from October 23 to 24, the cost of purchasing one Bitcoin reached record levels when using the Argentine peso, Nigerian naira, Turkish lira, Laotian kip, and Egyptian pound. However, it’s important to note that this achievement is primarily due to the ongoing devaluation of these currencies, which has been exacerbated by Bitcoin’s recent 16% price increase.
Inflation Rates and Crypto Adoption in Nigeria, Turkey, and Argentina
According to data from the International Monetary Fund (IMF), the Venezuelan bolivar currently has the highest annual inflation rate at 360%. This is followed by the Zimbabwean dollar (314%), Sudanese pound (256%), and Argentine oesi (122%). The Turkish lira and Nigerian naira rank sixth and fifteenth with annual inflation rates of 51% and 25%, respectively. It’s worth noting that Nigeria, Turkey, and Argentina are among the countries with high rates of cryptocurrency adoption globally.
Governments’ Stance on Cryptocurrencies
Despite the increasing adoption of cryptocurrencies in these countries, their governments have not always been supportive. Nigeria’s central bank banned local banks from providing services to cryptocurrency exchanges in February 2021. However, progress has been made since then, with Nigeria announcing its intention to pass a bill recognizing cryptocurrencies as “capital for investment” in December 2022.
In Turkey, while there is a high level of interest in cryptocurrencies among the population, the central bank banned cryptocurrency payments for goods and services in April 2021. The country has also been working on a central bank digital currency (CBDC) to digitize the Turkish lira.
Argentina is currently facing an inflation crisis, and the outcome of its upcoming presidential election in November could have an impact on the situation. One of the presidential candidates, Javier Milei, plans to launch a CBDC to address the country’s long-lasting inflation crisis. Another candidate, Sergi Massa, wants to defend the Argentine peso and keep the U.S. dollar away from Argentinians.
Hot Take: Bitcoin as a Hedge Against Inflation
The recent surge in Bitcoin’s price against inflationary fiat currencies further strengthens the narrative that cryptocurrencies, including Bitcoin and stablecoins, can serve as a hedge against skyrocketing inflation. As countries like Nigeria, Turkey, and Argentina grapple with high inflation rates, more people are turning to digital assets for financial stability and security.
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