American billionaire and investor, Paul Tudor, wrote an investor letter and released a list of inflation hedges, also referred to as “a host of assets that at one time or another have worked well in reflationary periods”. Tudor Jones identified Bitcoin as the best asset to be used as a hedge because it can maintain purchasing power, trust, liquidity, and portability.
Bitcoin Performance in 5 Countries with High Inflation
- Argentina According to Visual Capitalist data in 2022, Argentina ranks sixth as the country with the highest inflation rate in the world, reaching 88% in the past year. On April 18th, Argentina’s high inflation rate drove the price of BTC to a record high in the country. The exchange rate of BTC to the Argentine peso (ARS) exceeded more than 6.59 million ARS, according to aggregated price data tracked by Google Finance.
- Turkey The inflation rate in Turkey is the highest, reaching 85.5% in the past year. According to Google Finance, the performance of the Lira against Bitcoin is still quite good, with the price of BTC not yet reaching ATH in Turkey, despite the high inflation in the country. Meanwhile, Coingecko data (28/4) shows the price of Bitcoin against the Turkish Lira at TRY 573,944, recording a 1.3% decrease in the past year.
- Pakistan Pakistan has an inflation rate of 26.6% in the past year. Coingecko data (28/4) shows the price of Bitcoin against the Pakistani Rupee (PKR) at 8,383,934, recording an increase of 14.9% in the past year. According to Google Finance data, the price of BTC against PRK has been steadily increasing since November 2022, although it has not yet reached its peak. BTC/PRK.
- Ukraine Ukraine has an inflation rate of 26.6% in the past year. Coingecko data (28/4) shows the price of Bitcoin against the Ukrainian Hryvnia (UAH) at 1,090,429,952, recording a decrease of 8.3% in the past year. However, if we look at the data from Google Finance, the price of BTC tends to be volatile since 2022. At the beginning of 2022, the price of BTC against UAH declined following Russia’s declaration of war on Ukraine, then rapidly increased in April 2022, before falling again in July 2022. Since then, the price of BTC against UAH has had a good trend.
- Nigeria Nigeria has an inflation rate of 21.1% in the past year. Coingecko data (28/4) shows the price of Bitcoin against the Nigerian Naira (NGN) at 13,592,760,704, recording a decrease of 16.8% in the past year. Meanwhile, according to data from Google Finance, the performance of Bitcoin against the Nigerian Naira is quite volatile and still follows the movement of the global BTC price with USD, with an upward trend since the end of 2022.
In conclusion, based on the data from the five countries, a high inflation rate does not always lead to a significant increase in the price of Bitcoin against the local currency. The different responses of the BTC price to countries with high inflation levels can be influenced by a number of factors, such as market sentiment, adoption levels, demand for Bitcoin, government regulations and economic policies of the country. Despite these differences, Bitcoin has been identified as a good hedge against inflation by billionaire investor Paul Tudor Jones due to its ability to maintain purchasing power, trust, liquidity, and portability. As a result, it is important for investors to consider all the factors affecting the performance of Bitcoin in a high inflation environment before making investment decisions.
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