Egyptian forays into Bitcoin are reportedly allowing citizens to make a pass at dealing with the inflation and other poor economic indicators that plague the national economy.
With inflation numbers of up to 20% and unemployment over 7% last year, Egypt has its own particular economic problems.
One is the decrease in tourist traffic – where experts estimate that 15% of the country’s GDP comes from tourism, the Egyptians are hurting, since people aren’t touring the pyramids or other local attractions as they once did, due to coronavirus fears, travel limitations and more.
Then there’s the country’s dependence on the petrochemical industry, where the price of oil has been decimated, and dinosaur fossil fuels industries are giving way to the promise of new renewable energy infrastructure.
Another troubling indicator for Egypt is the nation’s request for $8 billion from the international monetary fund.
According to Cointelegraph, in the wake of all of this economic carnage, Egyptians are turning to mining very small units of Bitcoin called ‘Satoshi’ after BTC’s anonymous founder.
A Satoshi is, specifically, valued at 100 millionth of one Bitcoin, which means at the current Bitcoin valuation, one Satoshi is about one hundredth of a cent of the U.S. dollar.
Although the value seems infinitesimal, the ability of Satoshis to be traded and even mined is apparently a compelling idea behind a venture by some of the 16,000 Egyptians estimated to belong to a Bitcoin Egypt group that’s discovering how cryptocurrency provides off-ramps from a struggling fiat economy.
“(Some entrepreneurial Egyptians) started mining Satoshi, …and on a daily basis they are making profits of 4% to 5% from the difference between buying rates during the timing of demand decline and selling rates at the time of peak demand, besides some quarterly or yearly profits from unexpected hikes in Bitcoin rates,” writes Husayn Hashim, describing how this crypto activity helps Egyptians to hedge against domestic financial trouble.
Hashim cites data from Al-Monitor, which is also on record providing this explanation:
“Online work from home, reduced working hours and curfews have been imposed since March as precautionary measures against the outbreak of Covid-19 in Egypt … The huge business shift to online work from home along with reduced working hours and curfews are encouraging thousands of Egyptians to invest their spare time in unusual online businesses like mining and trading of cryptocurrencies, most notably the bitcoin.”
It’s just another example of how worldwide economic jitters push people toward cryptocurrencies – granted, Egypt is an extreme example, but one that may ultimately be very instructive for global investors.
