The rising cost of living around the world is causing fiat currencies to lose their value at a rapid pace. As a result, people are now looking for different investment options so that their money retains its value.
Crypto ownership rates have seen an increase in massive countries. Most notably, the citizens of Turkey, Argentina and the Philippines are looking towards seeking refuge with cryptocurrencies amid economic concerns.
Massive Spike in Crypto Investments by Turkey, Argentina and the Philippines
According to a report published by GWI research, Turkey saw the highest growth rate in crypto ownership in the last year. The reports show that Turkish citizens increased their crypto ownership, by 27.1% from July 2021 to July 2022.
The people of Argentina and the Philippines also followed the same suit as the Turkish people. With an increase of around 23.5% and 23.4% in ownership rates respectively, investors in both countries invested huge amounts in the virtual currency.
The study included individuals in the age group of 16 and 64 and evaluate if they have any sort of ownership in the cryptocurrencies. It included the top 15 countries that saw the highest surge in cryptocurrency ownership.
Furthermore, it also calculated the global average for the growth in crypto ownership which saw an increase of 11.9%. Turkey was in the first position on the chart while Argentina and the Philippines were in second and third.
Apart from these countries, Vietnam, Portugal, and the United Arab Emirates also saw strong growth in crypto ownership.
Inflation the Key Factor in Driving This Growth
While the report didn’t mention any particular reason for the surge in crypto ownership, Turkey, Argentina and the Philippines all share the same thing: hyperinflation. The currencies of all three countries experienced a rapid decline in their value.
In 2021, the Turkish Lira saw a decline of around 44% against the US dollar. The country continued to experience a high rate of inflation and by the end of 2022, the inflation rate had touched close to 72%.
This was one of the major reasons that motivated Turkish citizens to invest in crypto. The daily trading volume for the country reached an average of $1.8 billion. The case was no different for Argentina.
Argentina’s inflation rate crossed 90% in 2022, which is the highest since 1991. As citizens continued to see a declining value of the Argentine peso, they turned their eyes towards the crypto assets just like Turkey.
The country’s interest in crypto coins was evident when Bitcoin (BTC) was the top application in Argentina just a week after its launch. Similarly, the Philippines also had an inflation rate of 8.1% in December 2021.
Though the inflation rate might be less than that of Argentina and Turkey, it shows an increase of around 107% from the figures in 2021 (3.9%).
Rising Inflation Globally
The increasing inflation has been impacting almost every other country in the world. Countries like the UK, the US, and France, are also experiencing high inflation rates, leading to a higher cost of living.
There is a chain of events that has led to high inflationary pressure globally. Firstly, the Covid-19 pandemic disrupted the global economy in 2021. A year later, supply chain issues globally also added to the inflationary pressure.
In 2022, the Russian invasion of Ukraine caused oil and food prices to skyrocket as the region was producing and exporting these crucial resources to various countries. These factors have led to a spike in the inflationary pressure.
Some countries have already succumbed to the changing economic situations. Lebanon and Sri Lanka are the two countries that have recently experienced a massive impact on their economy.