Why has Bitcoin price hit new all-time highs in Turkey, Egypt, Nigeria and Argentina?
2023.12.13 17:42
Since bottoming around $16,800, Bitcoin (BTC) has displayed resilience throughout 2023, posting over 153% gains year-to-date and $143% over the last 12 months to outperform major tech companies.
BTC/USD Daily Chart. Source: TradingView
Despite this impressive performance, the flagship cryptocurrency’s price is still 39% below the all-time high (ATH) level reached in November 2021.
Meanwhile, Bitcoin continues to hit new ATHs in Argentina, Turkey, Egypt, Nigeria, Lebanon and Pakistan.
This is what #Bitcoin looks like for the citizens of Turkey, Egypt, Nigeria, Argentina, Lebanon and Pakistan.
A combined population of
725 MILLION people
Try to convince them Bitcoin is not useful. Good luck pic.twitter.com/z8poh2C7Wb— Tahini’s (@TheRealTahinis) December 13, 2023
According to the Dec. 13 post, at one point on Dec. 12, a single Bitcoin has reached ATHs against the Argentine peso at 15,176,100.12 ARS. BTC was worth 1,202,109.40 Turkish liras (TRY), 32,703,517.06 Nigerian nairas (NGN), and 1,280,955.47 Egyptian pounds (EGP).
The chart also showed that BTC has reached ATHs against the Lebanese pound and the Pakistani Rupee at 622,548,74.67 LBP and 11,736,063.26 PKR respectively.
It is worth mentioning that these figures are equivalent to the current price of Bitcoin.
It is worth noting that the meteoric rise of Bitcoin in these countries is due to high inflationary pressures, resulting in the devaluation of their respective currencies.
Data from the International Monetary Fund (IMF) ranks countries’ annual percentage change in inflation rates and end-of-period consumer prices.
Inflation Rates Per Country. Source: IMF
According to the chart 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 Nigerian naira came in fifth and 12th with annual inflation rates of 64% and 30%, respectively, IMF’s data shows.
For most crypto investors in these countries, Bitcoin has become a reliable store of value and a hedge against rocketing inflation.
Many of these countries including Nigeria and Argentina have been readily adopting cryptocurrencies despite the steady devaluation of their currency.
Nigeria, Turkey and Argentina boast the second, 12th and 15th highest rates of cryptocurrency adoption worldwide, according to a Sept. 12 report by Chainalysis.
Argentina’s Bitcoin adoption is likely to get a boost following the outcome of the Nov. 19 presidential election run-off which saw pro-Bitcoin candidate Javier Milei emerge the winner.
#Bitcoin is hope for Argentina. Congratulations @JMilei.
— Michael Saylor⚡️ (@saylor) November 20, 2023
After assuming office on Dec. 10, Milei appointed Luis Caputo as economy minister who announced on Dec. 12 that Argentina was devaluing the peso over 50% to 800 per dollar in an “emergency package” aimed at balancing the budget by 2024. This move appears to have been endorsed by the IMF.
NEW: Javier Milei’s economy minister announces a drastic “emergency package” to balance the budget by 2024
Measures include: layoffs for new public employees, cutting government positions by 34%, and cancelation of all public infrastructure
So far the IMF approves pic.twitter.com/MHlIZ79Bz8
— Bitcoin News (@BitcoinNewsCom) December 13, 2023
The IMF called the measures “bold” adding that they would “significantly improve public finances in a way that protects the most vulnerable in the society and strengthen the exchange rate regime”.
While on the campaign trail, Milei said he would abolish Argentina’s central bank if he took over as president.
Related: Bitcoin derivatives data points to traders’ $50K BTC price target
Bitcoin outperforms tech companies
During the extended 2022 bear market, Bitcoin fell relentlessly in tandem with tech stocks. According to a review letter by Pantera Capital – an American crypto hedge fund – Bitcoin has outperformed all of them except for Meta, which has recorded more than 172% gains YTD against BTC’s 162%.
The price of bitcoin was down in line with tech companies last year. This year it has massively out-performed most.
That’s the 14-year story of #bitcoin – higher lows and higher highs each cycle.
Our year-in-review letter: https://t.co/fy9wy78dVG
I’ll summarize below:
The… pic.twitter.com/cgvOdHZcBk
— Dan Morehead (@dan_pantera) December 12, 2023
Bitcoin bounced back in 2023 due to a “vast majority of significant events” which were “good news” with the “blockchain industry making meaningful, necessary progress”, according to Pantera.
The crypto hedge firm lists a number of these events including increased institutional adoption courtesy of “spot Bitcoin ETFs sponsored by large names in traditional finance – like BlackRock and Fidelity – and the leader in blockchain ETFs, Bitwise.” The potential approval of Bitcoin ETFs opens a new channel for traditional capital to be injected into Bitcoin as “digital gold”.
The letter also notes that the ability of the market to rely on the U.S. court system to be fair has been “reassuring” citing the ruling by Judge Analisa Torres that XRP is not a security and Grayscale’s win in their lawsuit against the SEC regarding their BTC application. These point to a favorable regulatory landscape for crypto in the U.S., enabling further innovation to occur onshore, the report noted.
In addition to these, the upcoming Bitcoin halving event in 2024 is also contributing to the widespread optimism surrounding the flagship cryptocurrency.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
