Over the span of October 23-24, Bitcoin has achieved new record prices when measured against some of the world's most inflation-prone fiat currencies, including the Argentine peso, Nigerian naira, and Turkish lira, among others.
This surge aligns with Bitcoin's recent 16% price increase and coincides with significant currency devaluation in these countries.
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The value of Bitcoin surged in Argentina, Nigeria, Turkey, Laos, and Egypt due to the continuous devaluation of their respective national currencies.
The decline in the value of the naira, lira, and peso is particularly notable. The first two currencies touched new lows against the US dollar on October 24th and 25th, while the peso is close to its all-time low.
According to data from the International Monetary Fund (IMF), these countries are experiencing high annual inflation rates. Argentina's peso, for example, has an inflation rate of 122%, while the Turkish lira and Nigerian naira have rates of 51% and 25%, respectively.
Nigeria, Turkey, and Argentina also rank among the top countries for cryptocurrency adoption, according to a September 12th report from Chainalysis. This information bolsters the notion that digital currencies like Bitcoin serve as a safeguard against high inflation. Yet, it's worth mentioning that the relationship between these governments and the crypto sector has been complicated.
Nigeria seems to be embracing cryptocurrencies after initially banning local banks from facilitating transactions for crypto exchanges in early 2021. The government later revised its stance, proposing a bill in December 2022 that would recognize cryptocurrencies as investment capital.
Similarly, despite Turkey's high level of crypto adoption, the country's central bank prohibited crypto payments for goods and services in April 2021 while also pursuing its own digital version of the Turkish lira.
Argentina's ongoing inflation issue might also be influenced by its forthcoming presidential election. Economy Minister Sergi Massa is pushing for launching a central bank digital currency (CBDC) to combat inflation. In contrast, his opponent, Javier Milei, advocates adopting the US dollar and even suggests canceling Argentina's central bank.
