A new record for Bitcoin is not always a reason to celebrate. Yes, that is good in our relatively safe Dutch economy, but in many other countries a peak is a sign that their own currency is about to collapse.
Bitcoin at an all-time high
Bitcoin also this week reached new historic highs in several inflation-prone countries. This month and Tuesday, buying Bitcoin in Argentine peso, Egyptian pound, Laotian kip, Nigerian naira and Turkish lira cost more than ever.
Lately, many coins have fallen against Bitcoin. This is because the dollar value of Bitcoin has increased, but also because at the same time the dollar value of these coins has decreased. The two only grew stronger.
On October 24 and 25, the values of the Nigerian naira and the Turkish lira fell to their lowest levels against the US dollar. The Mexican peso is also currently only 0.85% above its low against the US dollar.
The inflation numbers hurt
According to the International Monetary Fund (IMF), the Venezuelan bolivar currently has the highest annual inflation rate in the world, at 360%. This is followed by the Zimbabwean dollar with 314%, the Sudanese pound with 256% and the Argentine peso with 122%.
Turkey and Nigeria, which are in sixth and fifteenth place, are not doing much better. According to the IMF, annual inflation in Turkey is 51% and in Nigeria 25%.
Therefore, it seems very exciting and pleasant that Bitcoin has reached an all-time high in these countries. But it is immediately clear that this is accompanied by enormous suffering for the local population. Everything has become many times more expensive, Bitcoin is just a symptom of that.
Bitcoin protects against inflation
But Bitcoin can be much more than just a symptom. Michael Saylor says it best:
By buying Bitcoin you also benefit from the increase in the value of the currency. Inflation is rising and everything is becoming more expensive, but Bitcoin is rising a little more, so you’re actually running a little faster than the rest of the economy. By buying Bitcoin at the right time, you can protect yourself against inflation.
Source: BtcDirect
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
