Bitcoin has recently reached all-time high prices when measured against several inflationary fiat currencies, including the Argentine peso (ARS), Nigerian naira (NGN), Turkish lira (TRY), Laotian kip (LAK), and the Egyptian pound (EGT). This surge in Bitcoin’s value is primarily due to the ongoing devaluation of these currencies, which has been worsened by a 16% increase in the price of Bitcoin.
According to data from 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 are ranked sixth and fifteenth, with annual inflation rates of 51% and 25%, respectively, according to the IMF’s data.
Cryptocurrency enthusiasts have long viewed digital assets like Bitcoin and stablecoins as a hedge against rising inflation, and these recent developments seem to support that perspective. Nigeria, Turkey, and Argentina are among the countries with some of the highest rates of cryptocurrency adoption in the world.
However, it’s important to note that these countries’ governments have not always been supportive of the cryptocurrency industry. For instance, Nigeria had banned local banks from offering services to cryptocurrency exchanges in February 2021, but it started showing a more welcoming attitude towards cryptocurrencies in December 2022, aiming to recognize them as “capital for investment.”
Turkey, known for its crypto-curious population, banned cryptocurrency payments for goods and services in April 2021. At the same time, it has been working on a central bank digital currency (CBDC) to digitize the Turkish lira.
Argentina’s ongoing inflation crisis may be influenced by the outcome of its presidential election in November. Presidential candidate Javier Milei and competitor Sergi Massa are set to face off in a final run-off vote on November 19. Massa, the country’s minister of economy, has advocated for launching a CBDC to address Argentina’s long-standing inflation issues, while Milei has different plans, including adopting the U.S. dollar and abolishing Argentina’s central bank.
In summary, Bitcoin’s recent all-time highs against inflationary fiat currencies in certain countries highlight the increasing interest in cryptocurrencies as a hedge against inflation, despite varying government attitudes towards the crypto industry in those regions.
