The rupee, Pakistan’s currency, has lost a significant part of its value in the foreign exchange market. The effects of this collapse are being felt with inflation which is soaring. In this context, wouldn’t bitcoin (BTC) be an alternative allowing Pakistanis to safeguard the value of their assets? The question needs to be asked.
Bitcoin (BTC) is currently worth more than the Pakistani rupee
What if Pakistan opted for bitcoin (BTC) while its currency was sinking into the abyss? This is not a crazy idea at all. In fact, the question of whether Pakistan should adopt bitcoin has gained prominence in recent months.
The fact is that the value of the Pakistani rupee (PKR) has fallen significantly. A paradoxical situation. Because the PKR exchange rate has moved positively against the US dollar (USD) in the foreign exchange market.
In other words, the Pakistani rupee should have been worth more than it is now. On the contrary, its valuation collapsed so much that bitcoin (BTC) overtook it in terms of price. This, despite the poor shape of the asset on the crypto market.
The data provided by CoinMarketCap are quite revealing on this subject. They indicate that at the start of the year, one bitcoin was valued at nearly 3.77 million rupees. Which represents a 99% increase in its price compared to PKR.
The latest available data shows that one bitcoin is worth 7.51 million rupees today. This highlights the exponential growth of the flagship crypto compared to Pakistan’s official currency. Under these conditions, shouldn’t the State opt for bitcoin?
A choice in favor of BTC is not obvious
It is true that the situation of the rupee has been delicate this year, especially in the first half of 2023. A period which recorded the most significant increases in the value of bitcoin compared to the PKR. This, with notable peaks reached in April and July.
But the dynamic has changed somewhat since then. PKR having made partial gains against bitcoin, also surpassing the dollar in this regard. However, the choice to opt for bitcoin, or perhaps even the dollar, is dilemmatic.
The option is certainly possible to protect the purchasing power of Pakistanis in the face of the erosion of their currency. However, the latter is struggling to maintain its value compared to bitcoin and the US dollar.
Last month, PKR appreciated by a remarkable 6% against the US dollar. In particular thanks to an injection of 3 billion dollars in liquidity provided by the International Monetary Fund (IMF).
It must be said that the option in favor of adopting bitcoin should be kept on hand. Pakistan’s monetary situation demonstrates what several experts have been hammering home for months. Namely the usefulness of the asset as a valuable financial reference.
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