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@ TURI$MO
2024-08-13 02:52:48
Recent data shows a notable divergence in Bitcoin’s (BTC) performance year-to-date (YTD): it has increased by 1% against the US Dollar (USD) but surged by 10% against the Kenyan Shilling (KES) over the past eight months. This discrepancy becomes even more pronounced in light of recent events in Kenya, where widespread protests have erupted over controversial tax hikes and demands for greater governmental accountability. Here’s a detailed analysis of why Bitcoin’s value has diverged against these two currencies and how the current political climate in Kenya might be influencing this trend.
### 1. **Currency Depreciation and Inflationary Pressures**
The substantial increase in Bitcoin’s value against the KES compared to the USD can largely be attributed to the significant depreciation of the Kenyan Shilling. Over the past eight months, the KES has likely weakened considerably due to both economic pressures and political instability. The ongoing protests against proposed tax hikes and calls for government resignation reflect broader discontent and could exacerbate inflation and currency depreciation.
In such a volatile environment, Bitcoin is often viewed as a safe-haven asset. The 10% rise in Bitcoin relative to the KES indicates that the local currency has lost purchasing power rapidly, making Bitcoin more attractive as a store of value.
### 2. **Local Economic Conditions and Market Dynamics**
The protests in Kenya, which have been driven by dissatisfaction with proposed tax increases and demands for more accountable governance, are indicative of broader economic and political challenges. These issues can create significant uncertainty and instability, which in turn affects the local currency. As the KES depreciates amidst these challenges, Bitcoin’s value in local terms increases more sharply.
In addition, local market conditions—such as heightened demand for Bitcoin as a hedge against currency risk—may further drive up its price in Kenya. Limited trading options or high transaction costs could also contribute to amplified price movements in the KES market.
### 3. **Global Economic Influences and Exchange Rates**
The performance of Bitcoin against the USD and KES over the YTD period also reflects broader global economic trends. The USD tends to be more stable compared to emerging market currencies like the KES. The 1% increase in Bitcoin relative to the USD suggests a relatively stable global environment, whereas the 10% rise against the KES indicates more severe local economic disturbances.
The depreciation of the KES against the USD, exacerbated by the recent political unrest, has likely intensified the divergence in Bitcoin’s value between the two currencies. This reflects the impact of local economic and political instability on the value of digital assets.
### 4. **Arbitrage Opportunities and Market Speculation**
Arbitrage opportunities and market speculation may also play a role in the observed price discrepancies. In times of local economic or political turmoil, such as the current protests in Kenya, there can be increased speculative trading and volatility. Investors seeking to hedge against local currency risks may drive up Bitcoin’s value more significantly in Kenya compared to other markets.
### **Conclusion**
In summary, Bitcoin’s 10% rise against the Kenyan Shilling, contrasted with a 1% increase against the US Dollar over the past eight months, highlights the impact of local economic and political instability. The recent protests in Kenya, triggered by tax hikes and demands for better governance, have likely contributed to the rapid depreciation of the KES, amplifying Bitcoin’s value in local terms. Meanwhile, Bitcoin’s relatively modest increase against the USD reflects a more stable global economic environment. Understanding these dynamics is crucial for investors and stakeholders navigating the complexities of cryptocurrency and foreign exchange markets amid ongoing political unrest. #bitbiashara