Why did Bitcoin reach historical highs in Turkey, Egypt, Nigeria, and Argentina?
Author: Nancy Lubale, translated by LianGuai from cointelegraph
Bitcoin has recently performed strongly, once again reaching an all-time high price in multiple countries, proving its value as a hedge against inflation and a store of value.
However, despite its impressive performance, Bitcoin is still 39% lower than the historical high it reached in November 2021, relative to the US dollar.
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On the other hand, Bitcoin continues to reach new all-time highs in Argentina, Turkey, Egypt, Nigeria, Lebanon, and Pakistan. According to a post by Tahini, a user on social platform X, on December 13th, at some point on December 12th, the price of a single Bitcoin reached a new all-time high of 15,176,100.12 ARS relative to the Argentine peso. The values of BTC were 1,202,109.40 Turkish lira (TRY), 32,703,517.06 Nigerian naira (NGN), and 1,280,955.47 Egyptian pound (EGP).
The charts also show that BTC has reached new all-time highs relative to the Lebanese pound and the Pakistani rupee, reaching 622,548,74.67 LBP and 11,736,063.26 PKR, respectively.
It’s worth mentioning that these numbers are relative to the current price of Bitcoin, and the surge in these countries’ cryptocurrencies is due to the depreciation of their respective currencies caused by high inflationary pressures.
Data from the International Monetary Fund (IMF) ranks countries based on the percentage change in annual inflation rates and end-of-year consumer prices.
According to the graph above, the Zimbabwean dollar currently has the highest annual inflation rate at 396%, followed by the Venezuelan bolivar (250%), Sudanese pound (238%), and the Argentine peso (135%). The Turkish lira and the Nigerian naira rank fifth and twelfth with annual inflation rates of 64% and 30%, respectively.
For many cryptocurrency investors in these countries, Bitcoin has become a reliable store of value and a safe haven against high inflation. Despite the continuous devaluation of their national currencies, many countries, including Nigeria and Argentina, are actively embracing cryptocurrencies. According to a report by Chainalysis on September 12th, Nigeria, Turkey, and Argentina ranked second, twelfth, and fifteenth among countries with the highest adoption rates of cryptocurrencies. With pro-Bitcoin candidate Javier Milei winning the presidential runoff on November 19th, Bitcoin adoption in Argentina is expected to increase further. After taking office on December 10th, Milei appointed Luis Caputo as the Minister of Economy, who announced on December 12th that Argentina would devalue the peso by over 50% to 800 pesos per US dollar as an “emergency plan” to balance the budget by 2024. This measure seems to have gained recognition from the International Monetary Fund, which described the measures as “bold” and added that they will “protect the most vulnerable segments of society and strengthen the exchange rate regime, significantly improving public finances.” During his campaign, Milei expressed his intention to abolish the Argentine central bank if elected president.
Bitcoin Outperforms Tech Companies
During the long bear market in 2022, Bitcoin, along with tech stocks, had been experiencing continuous declines. According to a comment letter from LianGuaintera Capital, a US cryptocurrency hedge fund, Bitcoin has outperformed all other funds, except for Meta, which has seen a growth of over 172% since the beginning of the year, while BTC’s growth is at 162%.
LianGuaintera stated that due to the majority of significant events being positive news, Bitcoin is expected to rebound in 2023, and the blockchain industry has made meaningful and necessary progress.
This cryptocurrency hedge fund listed several events, including the increase in institutional adoption, benefiting from “well-known companies from the traditional financial sector, such as BlackRock and Fidelity, as well as the leaders of blockchain ETFs like Bitwise, supporting spot Bitcoin ETF.” The potential approval of Bitcoin exchange-traded funds opens up new channels for traditional capital to invest in “digital gold.”
The letter also highlights the market’s confidence in the fair ability of the US court system and refers to Judge Analisa Torres’ ruling that XRP is not a security, and Grayscale’s victory in the lawsuit against the US Securities and Exchange Commission regarding BTC ETF applications. The report indicates that all these factors demonstrate a favorable cryptocurrency regulatory environment in the US, allowing further innovation to happen domestically.
In addition, the upcoming Bitcoin halving event in 2024 has also intensified people’s general optimism towards this flagship cryptocurrency.
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