- Bitcoin price has retreated in the past few months as momentum fades.
- Despite this, it has done better than the Argentine peso and Nigerian naira.
- It has also outperformed the Russian ruble.
Bitcoin price plunged hard on Friday as risks in the financial market and the economy continued. After soaring to the year-to-date high of $32,000, Bitcoin retreated to below $26,000, ending a long period of consolidation.
Bitcoin plunge coincided with a major sell-off in global bonds, stocks, and even commodities. Bond investors lost billions of dollars last week as the 10-year and 30-year yields jumped to the highest level in more than a decade.
Stocks also declined, with the Nasdaq 100 and S&P 500 indices have retreated by more than 8% from the highest level this year. Other assets like crude oil, gold, and copper prices have also retreated.
Despite the retreat, Bitcoin, which is known for its volatility, is doing better than other currencies like the Nigerian naira, Russian ruble, and the Argentine peso. Bitcoin has soared by more than 60% this year.
ARS, NGN, RUB have plunged
The Argentine peso has plunged by more than 100% this year and is now sitting at the lowest level on record. This sell-off has intensified recently after the main presidential candidate promised to burn the central bank.
The Argentine peso (ARS) has dropped sharply as the country’s headwinds have accelerated. For example, the country’s agricultural production has plunged, forcing the government to import grain. At the same time, there are concerns about the country’s debt.
In Nigeria, the naira has plunged as the country’s new government ended oil subsidies, leading to higher inflation. The central bank also ended the dollar peg in a bid to narrow the gap with the black market rate. While the gap narrowed after the decision, it has now widened, with the Nigerian naira approaching 1,000.
The Russian ruble has plunged by more than 30% this year and is hovering at the lowest level since February last year. RUB crashed as domestic spending jumped because of the war in Ukraine and rising sanctions. Many Russian people and businesses have also been buying dollars, which is seen as a safe haven.
It is against this backdrop that Bitcoin price has soared against the Argentine peso, Nigerian naira, and Russian ruble. Bitcoin was trading at 2,903,649,549,058 against the Argentine peso.
Similarly, Bitcoin was trading at 315,712,518,093 against the Russian ruble, a few points below the year-to-date high of 399,409,842,004.
Therefore, as I wrote here, the best approach for people in Nigeria, Argentina, and Russia is to hold the US dollar. An alternative is for them to buy stablecoins like Tether, USD Coin, and Dai.
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