Bitcoin (BTC) is far from its all-time high of $69,000. However, it has recently achieved a remarkable feat by surging to unparalleled record highs when compared to the currencies of Argentina, Nigeria, and Turkey. Although its value remains relatively stable worldwide at around $35,000, Bitcoin’s price has seen substantial growth in these nations, reaching astounding levels of 12.17 million Argentine pesos (ARS), 979,017 Turkish liras (TRY), and 28.44 million Nigerian nairas (NGN). This striking upswing can be attributed to the prevalent challenge of hyperinflation that plagues these countries.
All three of these countries grapple with a common issue, marked by a concerning rise in inflation rates. Notably, Argentina faces triple-digit inflation. Faced with economic hardships and the ongoing devaluation of their national currencies, Bitcoin has emerged as the preferred alternative among the local population.
It is essential to note that these figures are a direct consequence of the continuous devaluation of these national currencies, a situation further exacerbated by Bitcoin’s recent 16% price surge. Both the Nigerian naira and Turkish lira recently experienced their lowest values against the U.S. dollar on Oct. 24 and Oct. 25, underscoring the severity of the economic challenges. Meanwhile, the Argentine peso remains alarmingly close to its historical low against the U.S. dollar.
Data provided by the International Monetary Fund (IMF) sheds light on the global inflation landscape. The Venezuelan bolivar currently holds the unfortunate distinction of having the highest annual inflation rate globally, standing at 360%. This is followed by the Zimbabwean dollar at 314%, the Sudanese pound at 256%, and the Argentine peso at 122%.
IMF data reveals that the Turkish lira and Nigerian naira hold the sixth and fifteenth positions globally in terms of annual inflation rates, with rates of 51% and 25%, respectively.
Adoption Trends in Cryptocurrency
In Nigeria, cryptocurrency transactions have experienced a notable surge. A 9% year-on-year increase, amounting to an impressive 56.7 billion as of June 2023. Turkey, where high inflation remains a significant concern. Nearly eight million people, constituting nearly 10% of the population, have turned to cryptocurrencies. This further comes with Bitcoin being the favored financial refuge.
In Argentina, Bitcoin has taken center stage in economic and political discussions. This is particularly true in the lead-up to an upcoming presidential election. Politicians are harnessing the potential of cryptocurrencies to garner support from voters. This further recognizes their profound influence on the nation’s financial landscape.
Cryptocurrency as a Hedge Against Inflation
For a substantial period, cryptocurrency enthusiasts have regarded digital assets like Bitcoin and stablecoins as effective safeguards against soaring inflation. Recent data further underscores this belief. According to a report by Chainalysis from Sept. 12, Nigeria, Turkey, and Argentina currently occupy the second, twelfth, and fifteenth positions globally in terms of cryptocurrency adoption rates. This underscores the growing popularity and acknowledgment of cryptocurrencies as essential financial tools within these nations.