Currencies of countries like Turkey, Iran, Argentina, and Venezuela are not at all doing well that has them migrate into the crypto market. As economies go through terrible times and currency crises heighten worldwide, Bitcoin and cryptocurrencies gradually become a potential choice to safeguard wealth.
Fiat money not working
All around the world, fiat currencies are going through crisis and economies are getting affected. The latest example is Turkey where recently its national currency Lira dropped a record low due to tariffs imposed by the US. If the difficulties keep on mounting, its government has to impose capital controls and stem capital outflow from the country, as put by Juan Villaverde of Weiss Ratings, which will increase the debt burden.
Another country is Argentina which is suffering from high inflation as the peso continues to fall. This has further beaten Argentina’s economy. Due to concern about Turkey’s economy, investors are fleeing from the emerging markets hence this month peso touched another low.
We already know about the economic condition and hyperinflation going on in Venezuela and the condition its currency Bolivar is in.
After the nuclear deal blow, at the beginning of this month, US put economic sanctions on Iran that led to its currency Rial to get dumped to serious levels, going past 100,000 rials to US Dollar.
The political tension at the global level is affecting almost everyone as another emerging market Brazil’s real fell to its lowest in two years.
Bitcoin to the rescue
In the wake of these events, people have started turning to cryptocurrencies in order to protect their investments and wealth. In Turkey, not only the Google Searches for Bitcoin doubled, but the trading volume on the crypto exchanges also took a spike.
Moreover, as put by Weiss Ratings’ Juan Villaverde,
“Should Turkey decide on capital controls, expect Bitcoin to trade at a significant premium on the country’s OTC markets.”
Countries like Argentina understand the currency collapse scenarios and that bitcoin and cryptocurrencies can help in preserving their wealth.
As for Iran, in order to protect itself from the US sanction, it has been turning to bitcoin and planning to create their own cryptocurrency. The country further removed US Dollar from its official currency rate reporting platform, replacing it with China’s Yuan.
When it comes to Venezuela, the citizens of the country are finding the safe haven in Bitcoin. And its president Nicolas Maduro introduced the controversial Petro cryptocurrency. Another cryptocurrency Dash is also making a lot of headway in the country.
Also, recently amidst the US-China trade war and Japanese waiting on Bank of Japan to make a decision on interest policy, the bitcoin trading volume and price took a hike as well. Every time something like this happens, people migrate into cryptocurrencies.
Bitcoin or cryptocurrencies won’t become the new financial standard over the night, rather it will take a long time for the masses to settle here and demand the government to provide them the same level of value, transparency, and accountability.