How Currency Crises are Driving Cryptocurrencies Higher
Fears of currency crisis contagion are pushing investors into cryptocurrency. As a result, global adoption is quickly gaining momentum, especially in areas facing crippling inflation.
“We’re seeing this with Turkey right now. Ukraine, Argentina, these are countries with very high inflation rates with of 20-30% or something. 20-30%, we think is enough to get people to try something new. We’re going to try and be successful first in Venezuela before branching out to try this in other countries,” reports Business Insider.
Venezuelans have been quick to accept DASH thanks to hyper inflationary issues.
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In fact, many are turning to cryptocurrencies as a way to store value as the Bolívar’s exchange rate spirals far out of control. The most recent devaluation of the country’s currency is only likely to increase its adoption of Dash by a higher margin. All as inflation in the economically disastrous country approaches one million percent.
“We are seeing tens of thousands of wallet downloads from the country each month,” Ryan Taylor, the CEO of the Dash Core Group, told Business Insider. “Earlier this year, Venezuela became our No. 2 market, even ahead of China and Russia, which are, of course, huge into cryptocurrency right now.”
Facing U.S. sanctions, Iran’s rate of inflation recently jumped to 18%. As a result, the country announced plans for a state-run cryptocurrency. Apparently, a coin could be used as a valid form of currency to make payments between banks, as well as being used as a means for other local payments. It would also be used to allow for easier payments in and out of Iran.
Argentina for example is struggling, as investors fear Latin America’s third-largest economy will default on debt. The news comes not long after Argentina’s government requested a $50 billion loan from the International Monetary Fund (IMF). At the moment, the Argentine peso crashed to record lows, hitting 39 pesos against the U.S. dollar. With prices now spiraling out of control, accompanies by falling currency, cryptocurrencies can help solve the problem.
With the Turkish lira under pressure, trading volume on Turkey’s cryptocurrency exchanged surged. Worries over a fragile Turkish economy and risk of contagion in Europe sent markets into a tailspin in recent months. Part of the reason for the decline was due to increased tariffs from President Trump.
“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time,” President Trump tweeted.
As the chaos unraveled, trading volume on Turkey’s cryptocurrency exchanged surged.
In fact, volume at Turkish exchanges, such as Parinu, Btcturk, and Koinim each saw volume up 100% for cryptocurrencies.
It’s just further proof that crises lead to opportunity.
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