Why has Bitcoin price reached new all-time highs in Turkey, Egypt, Nigeria and Argentina?
Since bottoming out at around $16,800, Bitcoin (BTC) has shown resilience in 2023, posting gains of over 153% year-to-date and 143% over the past 12 months, outperforming major tech companies.
BTC/USD daily chart. Source: TradingView
Despite this impressive performance, the price of the flagship cryptocurrency is still 39% below the all-time high (ATH) reached in November 2021 against the US dollar.
Meanwhile, Bitcoin continues to hit new highs in Argentina, Turkey, Egypt, Nigeria, Lebanon and Pakistan.
This is what #Bitcoin looks like for citizens of Turkey, Egypt, Nigeria, Argentina, Lebanon and Pakistan.
A total population of
725 MILLION people
Try to convince them that Bitcoin is not useful. Good luck pic.twitter.com/z8poh2C7Wb
— Tahinis (@TheRealTahinis) December 13, 2023
A post by the user of the social platform BTC was worth 1,202,109.40 Turkish lira (TRY), 32,703,517.06 Nigerian naira (NGN) and 1,280,955.47 Egyptian pounds (EGP).
The chart also shows that BTC has reached highs of 622,548,74.67 Lebanese Pound and 11,736,063.26 Pakistani Rupee against the Lebanese Pound and Pakistani Rupee, respectively.
It is worth noting that these figures correspond to the current price of Bitcoin and that the meteoric rise of the cryptocurrency in these countries is due to high inflationary pressures that are causing the devaluation of their respective currencies.
Data from the International Monetary Fund (IMF) assesses the annual percentage change in inflation rates and consumer prices at the end of the reporting period.
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%), the Sudanese Pound (238%) and the Argentine Peso (135%).
The Turkish lira and Nigerian naira ranked fifth and 12th, respectively, with annual inflation rates of 64% and 30%, IMF data shows.
For most crypto investors in these countries, Bitcoin has become a reliable store of value and a hedge against skyrocketing inflation.
Many of these countries, including Nigeria and Argentina, have readily adopted cryptocurrencies despite the steady devaluation of their currencies.
According to a September 12 report from Chainalysis, Nigeria, Turkey and Argentina have the second, 12th and 15th highest rates of cryptocurrency adoption in the world.
Argentina's Bitcoin adoption is set to get a boost following the outcome of the Nov. 19 presidential election runoff, which saw pro-Bitcoin candidate Javier Milei emerge victorious.
#Bitcoin is hope for Argentina. Congratulations @JMilei.
— Michael Saylor⚡️ (@saylor) November 20, 2023
After taking office on December 10, Milei appointed Luis Caputo as Minister of Economy, who announced on December 12 that Argentina would devalue the peso by more than 50% to 800 per US dollar as part of an “emergency package” to support the budget through 2024 to balance. This move appears to have been approved by the IMF.
NEW: Javier Milei's Economy Minister announces a drastic “emergency package” to balance the budget by 2024
The measures include: laying off new civil servants, reducing government positions by 34% and eliminating all public infrastructure
So far the IMF agrees pic.twitter.com/MKlIZ79Bz8
– 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 society and strengthens the exchange rate system.”
During his campaign, Milei said he would abolish Argentina's central bank if he took over as president.
Related: Bitcoin derivatives data suggests traders’ BTC price target of $50,000
Bitcoin outperforms technology companies
During the ongoing bear market in 2022, Bitcoin fell inexorably alongside technology stocks. According to an audit letter from Pantera Capital – an American crypto hedge fund – Bitcoin has outperformed all except Meta, which has seen a year-to-date gain of more than 172% compared to 162% for BTC.
The price of Bitcoin fell alongside tech companies last year. This year it has significantly outperformed most.
This is the 14 year history of #bitcoin – higher lows and higher highs in every cycle.
Our annual review letter: https://t.co/fy9wy78dVG
I summarize below:
The… pic.twitter.com/cgvOdHZcBk
— Dan Morehead (@dan_pantera) December 12, 2023
According to Pantera, Bitcoin rallied in 2023 due to a “vast majority of significant events” that were “good news,” with the “blockchain industry making significant, necessary progress.”
The crypto hedge firm lists a number of these events, including increasing institutional adoption thanks to “spot Bitcoin ETFs sponsored by big names in traditional finance – like BlackRock and Fidelity – and the leader in blockchain ETFs, Bitwise “. The possible approval of Bitcoin exchange-traded funds opens a new channel for the injection of traditional capital into Bitcoin as “digital gold”.
The letter also notes that the market's ability to rely on the fairness of the US court system is “reassuring,” citing Judge Analisa Torres' ruling that XRP (XRP) is not a security, and on Grayscale's victory in its lawsuit against the Securities and Exchange Commission regarding its BTC ETF application. These suggest that there is a favorable regulatory environment for cryptocurrencies in the US, which will enable further innovation on land, the report says.
Additionally, the upcoming Bitcoin halving in 2024 is also adding to the widespread optimism surrounding the flagship cryptocurrency.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.
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