There are different emerging economies around the world that have experienced turbulence in the last months. Their currencies depreciated and inflation rates substantially increased. However, this could be positive for Bitcoin adoption around the world. Let’s see what happened in Argentina, Venezuela, Turkey and Ukraine.
Emerging Markets Embrace Bitcoin
Turkey was the first country experiencing strong economic problems some time ago. U.S. President Donald Trump imposed taxes to aluminum and steel imports from Turkey. He has also decided to include other financial sanctions.
In just a year, the Turkish Lira lost 97% against the US Dollar. This has certainly damaged Turkey’s economy and companies.
With capital controls in the country, investors turned to virtual currencies, but specifically to Bitcoin. At least, this can be seen in the volume of Bitcoin transacted in Local Bitcoins. The number of Bitcoins moved reached the highest levels in 2018.
According to Coinhills, the Turkish Lira (TRY) is the 7th most traded currency against Bitcoin around the world. In the last 24 hours it moved almost 1,200 BTC.
In Argentina, the situation looks very similar. Although the South American country has not been affected by Trump’s tariffs, the Argentine Peso (ARS) has devalued against the US Dollar 120%. Right after the latest devaluation (20% on August 30), the central bank increased interest rates up to 60%.
Since the beginning of the year, Argentina has experienced an increase in the number of Bitcoin transacted through Local Bitcoins. During the last weeks the market experienced the highest number of transactions in the year.
Venezuela is also in a very complicated situation. Citizens are moving towards virtual currencies. For example, Dash is being used in the country more than in any other nation. Additionally, individuals living in Venezuela are mining virtual currencies to survive and pay their local bills or save some funds.
According to Local Bitcoins, Venezuela has registered a very important increase in the number of Bitcoins transacted. This year, the number of Bitcoins transactions increased 157% from 244 to 628 Bitcoins.
According to the International Monetary Fund (IMF), the inflation in Venezuela is going to reach 1 million percent. According to Alejandro Werner, head of the IMF’s Western Hemisphere department, the crisis is comparable to that of Germany in 1923 or Zimbabwe in the late 2000s.
About it, Werner wrote:
“The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries.”
Bitcoin is used as a safe haven when crisis appear in some countries. However, there were no important crisis in developed countries to compare and see the results. Bitcoin has been in the market in the last 10 years, but since 2016 it has experienced an important growth.
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