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Bitcoin at its all-time high in 8 inflation-ridden countries

Photo of: Joseph Stone
by Joseph Stone

Inflation is a risk in times of crisis. In some countries, the economic crisis did not wait for COVID-19 to strike. In a precarious situation for years faced with the devaluation of their local currencies, many people have turned to Bitcoin.

In times of inflation, prices undergo a significant increase. As a result, the local currency loses its intrinsic value. Indeed, for the same product, it is necessary to spend more money to buy it.

This problem affects many economies, particularly in South America with the infamous example of Venezuela. At the level of European economies, inflation is closely monitored. Indeed, the numerous stimulus packages voted have caused a flood of liquidity to flood the markets. The currency board is starting to work again, which makes us fear the worst in terms of the risk of inflation.

Cryptocurrencies are increasingly seen as a safe haven against inflation, just like gold. Bitcoin leads the way thanks to the maturity of its ecosystem. For the past week, the price of Bitcoin has been going crazy, so much so that people no longer hesitate to talk about the bull run that investors have been waiting for for so long.

8 countries affected by inflation that are seeing the value of Bitcoin soar

After the black Thursday in mid-March that hit cryptos following the outbreak of the COVID-19 crisis, the price of cryptos recovered very quickly. For the past week, the course has even been in full swing. The price of Bitcoin, for example, has increased by about 300% since that famous Black Thursday.

Bitcoin has not (yet) reached its peak (ATH) of December 2017 where its price exceeded $19,000. However, when converted into local currency, its rate has reached its highest level for the following eight countries: Brazil, Turkey, Argentina, Sudan, Angola, Venezuela, Zambia, and Pakistan. This is explained by the fact that these are countries that are strongly affected by inflation. Thus, at the time of Bitcoin’s ATH (in dollars) in 2017, the value of the local currency of these countries was much higher than it is now. Now, even if the Bitcoin rate (in dollars) is not at its historical maximum, it is high enough to represent an ATH in the local currency of these countries.

For example, on December 15, 2017, when Bitcoin set its record price at $19,650, this represented about 64,640 Brazilian reals. On Thursday, October 22, 2020, with a Bitcoin around $12,986, this represents about 72,600 Brazilian reals, which is a record.

This data shows the interest in the use of cryptocurrencies by people hit hard by inflation in some parts of the world. Where in America or Europe the use of cryptos is an investment, in these countries, it is clearly a concrete solution to protect their purchasing power and their wallets.