“Bitcoin’s meteoric rise to all-time highs in Argentina, Nigeria, and Turkey showcases its growing global acceptance as a reliable alternative currency, empowering individuals in economies plagued by inflation and economic uncertainty.”
The price of Bitcoin (BTC) has reached new all-time highs against several inflationary fiat currencies. Over a span of 30 hours, Bitcoin hit record highs when compared to the Argentine peso, Nigerian naira, Turkish lira, Laotian kip, and the Egyptian pound. However, it’s important to note that this increase is primarily due to the ongoing devaluation of these currencies, which has been exacerbated by Bitcoin’s recent 16% price increase.
According to the International Monetary Fund (IMF), the Venezuelan bolivar currently has the highest annual inflation rate at 360%, followed by the Zimbabwean dollar (314%), Sudanese pound (256%), and the Argentine peso (122%). The Turkish lira and Nigerian naira also have high inflation rates of 51% and 25% respectively, according to IMF data.
Cryptocurrency observers have long seen digital assets like Bitcoin and stablecoins as a hedge against inflation, and these recent figures could strengthen that narrative. Nigeria, Turkey, and Argentina are among the countries with the highest rates of cryptocurrency adoption worldwide.
However, the governments of these countries have not always been supportive of the cryptocurrency industry. Nigeria, for example, banned local banks from providing services to cryptocurrency exchanges in February 2021. But progress has been made, with Nigeria announcing its intention to recognize cryptocurrencies as “capital for investment” in December 2022.
Turkey, known for having a high number of crypto-curious individuals, 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, on the other hand, is facing an inflation crisis that could be influenced by its upcoming presidential election in November. Presidential candidate Javier Milei wants Argentina to launch a CBDC to address the long-lasting inflation crisis, while his competitor, Sergi Massa, wants to defend the Argentine peso and keep the U.S. dollar away from Argentinians.
Overall, the increasing adoption of cryptocurrencies in countries with high inflation rates highlights their potential as a hedge against inflation and a store of value.