Hyper-Inflation Results in New Bitcoin All-Time Highs in Argentina and Sudan
All the news in the industry about whether or not Bitcoin is really bullish and can sustain its price rally is only a serious conversation in places where traders use the U.S. Dollar and a few other strong currencies to invest in crypto. In other places, however, Bitcoin has offered huge profit for investments. For investors in Argentina and Sudan, there might not be a better time than now for their investment.
Bitcoin’s all-time high price was about $250 short of $20,000 in 2017. As it turns out, even if an investor put down Argentine pesos at that rate, the current rate of about $8,000 would still give said investor substantial profit. However, if you invested using the Sudanese pound at that time and at the same rate, your money right now would probably be double of what it was then.
As one crypto enthusiast, Josu San Martin (@josusanmartin) put it on Twitter:
“If an Argentinian had bought Bitcoin at the highest point of the “biggest bubble in history”, in 2017, he would have been better off than leaving his money in his Argentinian bank account. So tell me again how Bitcoin is a horrible store of value.”
This type of occurrence is largely due to many of the worlds fiat currencies, especially in developing countries, crashing because of uncontrollable inflation rates and mismanagement.
Bitcoin In Argentina
At more than one million percent, Venezuela is the country with the highest rate of inflation in the world. The Venezuelan government tried to float a digital currency to salvage this but the Petro Dollar – as it’s called – failed terribly. Apart from Venezuela, Argentina is another country with terrible inflation rates.
The South American nation had its inflation rate increase by 50 percent last year. The economy is however not getting better as the rate is expected to go up by another 36 percent before the end of 2019. This has caused the Central Bank of Argentina to officially increase its interest rates to 60 percent. At the moment, the economy is almost entirely surviving on a loan from the International Monetary Fund (IMF) worth $50 billion.
Because of the state of the economy, Bitcoin has become currency for many Argentines who can no longer rely on the official fiat and transaction volumes are skyrocketing. Recently, in the heat of the Bitcoin rally, transaction volumes in the country reached a weekly figure of $14 million.
Bitcoin in Sudan
Sudan is another country experiencing hyperinflation. The wars survived by the Northern African country are still regarded as the reason why there is still so much economic unrest and inflation. Inflation in Sudan hit 44 percent and is affecting life so much that the citizens are decrying the scarcity of cash in ATMs, the fact that fuel has to be rationed and also decrying a few other restrictions and measures employed by the Central Bank.
Back in 2017 at Bitcoin’s peak, 1 BTC was worth about 200,000 Sudanese pounds. At the moment, 1 BTC is almost double of the 2010 equivalent in Sundanese pounds. Locals, just like they do in Argentina, have begun using Bitcoin for transactions and also to send money to friends and family.
Can Bitcoin Solve This Problem?
Bitcoin as a substitute for increasingly valueless fiat seems almost inevitable at this point. If the average Argentine or Sudanese person is constantly watching the value of money drop right before them, they might have no choice but to turn to Bitcoin as a worthy alternative.
Nic Carter, a stakeholder in the sector, supported this view in a recent tweet saying:
“This is going to start happening more and more. Sovereign currencies only depreciate over the long term. Bitcoin appreciates in the long term.”
The very decentralized nature of Bitcoin makes it a strong competition for failing fiat currencies. Since it is not controlled by any government or central bank, locals in these places will unavoidably turn to it.
Already, these nations experiencing dangerous levels of inflation are recording steady increase in Bitcoin transaction volumes. Countries like Peru, Thailand, Venezuela, Kazakhstan, and Argentina are atop this list.