Topic: Almost All Countries Affected by Inflation, Opportunity for Bitcoin! - page 4. (Read 482 times)

You raise a good point because the inflation of some countries does not depend only on the funds they are keeping in their reserves. There is no doubt that one having more gold in reserves will face less inflation than one having less gold in reserves, but that's applicable only in the context of gold. Talking about BTC, we cannot surely say that BTC is the main reason behind El Salvador's inflation rate.

Inflation rates depend on many other things, like the imports and exports of the country, the product level, and the disasters that occur in the country. A country also faces huge inflation if the government is corrupt, like in the recent thread created where the OP was showing that Nigeria's inflation is increasing, and in that thread, many locals said the main reason is the corrupt leaders. And I very much agree with this reason.

We are also facing the same problem of corrupt leaders, but we can't do anything about it openly. Besides this, I will say the current war does have some impact on the BTC price because people who have time to think about their money in war might think to covert it in some form where it can be preserved from the destruction of the war. And they will put money in BTC, but they can put money in gold too. But if you invest in BTC, the price will increase.

Absolutely nothing to do with Bitcoin!

This is Salvador

This is neighboring Guatemala

This is far better faring Panama


Now, why don't you do other countries that were supposed to have high adoption rates and see if there is any correlation?
Like you know, Turkey for example, with about 45% of its population owning crypto?  


I wish people would start to understand that what's good for your personal finances is not immediately good at a country level maybe actually worse!
Example:
a) You exchange 10 000 Turkish lira to Bitcoin, you get your coins, and nothing extraordinary happens
b) 100 million people exchange 10,000 Turkish lira to Bitcoin, and suddenly there is a sell order of $33 billion worth of turkish lira on the market that nobody wants, what do you think that will do to the value of the currency? Drop it like a stone, making the previous buys impossible and turning the lira into dust! Weimar Republic? Sounds a bell?

Most of these countries are having some political or economic crisis which is a reason for the inflation. The central bank has the ability to control the circulating supply of fiat currencies but in all these countries the government is using the central bank to print more money so that they can buy dollars from the market with their newly printed money and pay interest. If the central bank could work as an independent organization without any influence from the government the situation wouldn't be that bad.

Sometimes inflation isn't all bad as it encourages people to spend their money which increases a country's GDP. Also there is no point in holding fiat currencies which are losing their value gradually but that doesn't mean everybody will buy bitcoin with their fiat currencies. However i don't think bitcoin needs an opportunity to be recognized globally and its real utility will come from its adoption which is not happening as it is supposed to. Nevertheless we are getting more people onboard but bitcoin's only use case right now is as a store of value which is good but we need a real utility in our society for bitcoin to be a world currency.

You started a great topic dear, I did not come to think to compare the countries that adopted BTC legal tender with the countries that did not. That's a good comparison but your statement that High Gold or BTC (more assets) are the sole reason for the decrement in inflation is wrong. Because we (Pakistan) don't have high reserves of Gold, and we don't even accept BTC instead we have banned it. But our inflation rate decreased from 31.44 to 27.38. That's quite the opposite of what you are trying to imply here. But I got your point.

Bitcoin no doubt is the best hedge against inflation and we can store our money in it for a longer period of time without losing any penny. And it has been proved. But, talking about El-Salvador, they bought BTC and accepted it as a legal tender when BTC was around $50k means, they entered the market when it was already high. They are already at a loss but as for now market is going up so the comparison looks odd because they are to get some good improvements that are obvious.

And BTC doesn't have to care about countries' inflation, BTC doesn't need the attention of countries or entities (technically it does but hypothetically speaking) it doesn't, instead we need BTC.  

If you spend your money, you lose it. If you save it, due to inflation, you also lose it. It is sad, but that's reality nowadays. In a country with a not so high inflation (not even in the list), a friend of mine is saving to buy a house, at a slower pace than the rise of prices, and the clock keeps ticking. I don't want to even think how Venezuelan and Argentinian citizens must feel.

Investing in crypto in general is high risk, and Bitcoin is not much different (it is safer, but still high risk), so I wouldn't recommend to do it as a way to make sure money. But with such high interest rates, the alternative of doing nothing is proven to be much riskier.

Perhaps the op was unaware or didn't factor that in, but El Salvador's fiat currency is the USD. The USD is pretty good at managing inflation, and that has a major impact, so I think El Salvador's inflation rate is probably due to that rather than due to Bitcoin. Clearly, it's not just that, as the inflation rate for the USA is different, but I just think it probably has a much higher impact than Bitcoin does, as much as we'd like Bitcoin to have a high positive impact. El Salvador's actually only keeping a fraction of its budget in Bitcoin, as even they, with all of that pro-Bitcoin stuff, understand the risks.

Of course, we all know everything advantageous if you were to use Bitcoin and HODL it. It's going to be different for every country but the important thing to see if it has really an effect is that there would be more countries to adopt it. We cannot really quantify if we have so little data. If there would be somewhat of a Bitcoin standard, that would be interesting as well.

I don't believe there's much correlation between El Salvador's Bitcoin adoption and the relatively low inflation rate. There are plenty of other countries that are in a similar position without having adopted Bitcoin; see Kosovo, Belarus, and a few other countries on the Asian or African continent. On top of that, I remember reading an article a few months ago that said Bitcoin transactions are still not that common and its usage is pretty low. So far, El Salvador's experiment has little to show, as a large number of people only took advantage of the early signup incentives and gave up after a short time period, while it cost El Salvador millions in infrastructure.

https://tradingeconomics.com/country-list/inflation-rate-

*I took the data from tradingeconomics.com

Almost all countries in the world experience inflation. From the data that I have seen, the largest inflation was occupied by Venezuela at 318%, followed by Lebanon. As we can see for ourselves in the table above or visit the tradingeconomics.com website to find out the details. This is really worrying, in essence all countries are threatened and have the opportunity that their currency will become increasingly worthless due to this inflation.

Is there a way to deal with this if the financial system remains like this? Is it too late to change? Or has this already caught up?

If we look here, El Salvador has a relatively small inflation rate, namely 3.02 percent. We know that the country is starting to stockpile Bitcoin and mine Bitcoin at the same time.

Maybe at this time we cannot conclude that Bitcoin plays a role in suppressing inflation in this country. It takes several years of data and country consistency in adopting Bitcoin.

Just to the point, I want to hear your opinions on this.

Whether Bitcoin is able to help countries overcome inflation, at least it provides options for growing a country's investment value.

Of course, I also know that there will be several policies or efforts to reduce inflation in a country.

However, if possible, are there opportunities such as hoarding gold and Bitcoin that can provide economic stability and reduce the inflation rate?

On average, countries that experience low inflation rates have large gold reserves.

https://wisevoter.com/country-rankings/gold-reserves-by-country/#argentina

Cheers, let's discuss..