Turkey and Argentina are seeking safe haven by turning to volatile cryptocurrencies amid the crashing fiat and soaring commodity prices.
According to audience research company GWI, ownership of digital currencies in Turkey was the highest in the world at 27.1 percent, followed by Argentina at 23.5 percent, which is well above the global crypto ownership rate estimated at 11.9 percent.
Both countries are submerged in the ongoing record-breaking inflation, which has led to crumbling currencies and capital controls to deter local residents from taking money out. Turkey's annual inflation was 50.51 percent in March, while Argentina's was even higher at 104 percent. The nations' currencies are also hitting the bottom. Argentina's peso exchange rate is at 464 per dollar in the black market, which is more than double the official exchange rate of 222.
According to Reuter's report, much of the safe-haven buying has been of stablecoins such as USD Coin (USDC) and Tether (USDT). Both crypto tokens pegged one-to-one to a traditional asset such as the U.S. dollar or gold, giving investors an alternative to scarce dollars.
"Folks, whether they're on the retail side or institutional side, are thinking about how can we hedge against currency devaluation," said Ehab Zaghloul, chief research scientist at Tribal Credit, a digital payments platform for startups in emerging markets. "They want to potentially hold additional assets pegged to a stronger currency – things like USDC or USDT or anything pegged to a stronger currency like the U.S. dollar."
Meanwhile, the trading volume for the USDT-Turkish lira pair reached a multi-month high last week, driven by the weakening of the Turkish currency and the upcoming landmark presidential and parliamentary elections, said Dessislava Aubert, an analyst at digital assets data provider Kaiko.
"In general, crypto adoption tends to be higher in countries with capital restrictions, financial instability and political instability," analysts at K33 Research added.
Europe using digital assets to survive looming economic crash
European nations are also resorting to adopting and using digital assets to survive the looming economic crash as the continent is seeing an acceleration in the adoption of cryptocurrency on a global scale. However, due to some circumstances, they've introduced tighter regulations relating to crypto.
Compared to 2021, the share of adults in France who became aware of cryptocurrency increased tremendously in 2022. More than half of crypto investors were interested in buying and holding crypto.
During the first half of 2022, more than half of surveyed crypto owners also indicated plans to increase their current crypto holdings over the next 12 months. The 18-39 age group is estimated to be more interested in acquiring more digital assets compared to older generations. According to the new report, Bitcoin and Ethereum were among the most favored cryptocurrencies during the first half of last year.
Meanwhile, the story changed when the decline in value of the cryptocurrency market worldwide beginning in the spring of 2022 led to the loss of investor enthusiasm and negative asset price movement across Europe.
Cryptocurrency exchange and hedge fund FTX fell and digital asset lender BlockFi went bankrupt, prompting European lawmakers to establish licensing and supervision rules beginning 2024. (Related: Former multibillion-dollar crypto firm FTX files for bankruptcy.)
Authorities believe that the new crypto rule book in Europe will enable consumer protection and maintain market integrity as well as financial stability.
Meanwhile, Dr. A. Can Inci, a Bryant University professor who recently published the book titled "Contemporary Issues in Quantitative Finance," warned the public to be extra careful in investing in crypto as its volatility roots from there is nothing backing its value.
"I have experimented with investing in cryptocurrencies so I could advise my students. But, while I saw my small investment quadruple very quickly, it came crashing down, proving their risk," he said. "So, be cautious of friends pushing you to invest because, if you do a little digging, you might find they are trying to drive up the value of their coins by increasing the demand."
Visit CryptoCult.news to read more news about cryptocurrencies.
Watch the video below where White House Press Secretary Karine Jean-Pierre calls for regulations of cryptocurrencies.
This video is from the Chinese taking down EVIL CCP on Brighteon.com.
More related stories:
Biden White House slams cryptocurrencies, says they're not valid assets.
CLAIM: Signature Bank shut down and seized by feds to send warning message to crypto industry.
Crypto exchange SUSPENDS trading of tokens for NYC and Miami.
Sources include:
Please contact us for more information.