- Hunter Horsley, the CEO of Bitcoin ETF issuer Bitwise, emphasized the potential role of Bitcoin (BTC) as a hedge against such crises.
- Horsley’s statements highlight the increasing interest in Bitcoin as a store of value and a hedge against economic uncertainties.
- According to a Reuters report, the Central Bank of Egypt (CBE) signaled a shift towards market-determined exchange rates, in line with IMF recommendations.
Amid Egypt’s recent economic troubles, Hunter Horsley, the CEO of Bitcoin ETF issuer Bitwise, detailed how Bitcoin could serve as a hedge in such a crisis.
Potential Role of Bitcoin in Egypt’s Crisis
In the midst of Egypt’s economic troubles, Hunter Horsley, the CEO of Bitcoin ETF issuer Bitwise, emphasized the potential role of Bitcoin (BTC) as a hedge against such crises. Meanwhile, Egypt has made progress in securing an extended $8 billion deal with the International Monetary Fund (IMF) and additional financing for environmental sustainability. The country also aims to balance its economy in the face of ongoing challenges.
This move came as the Egyptian pound weakened beyond previous records, dropping to over 50 pounds to the US dollar from its previous level of around 30.85 pounds, marking a significant decline. The decision to free the currency reflects Egypt’s efforts to restore investor confidence and meet the IMF’s demands for a more flexible exchange rate.
However, doubts persist about the government’s commitment to long-term structural reforms, including reducing state and military economic involvement. Meanwhile, Hunter Horsley, the CEO of Bitwise, expects those holding Bitcoin in such a crisis to be in a better financial position.
Horsley stated, “People have many reasons to buy Bitcoin. This is a scenario everyone hopes to avoid. But the reality is, those who own Bitcoin today have outperformed others, especially in terms of the US dollar.” Horsley’s remarks underscore the growing interest in Bitcoin as a store of value and a hedge against economic uncertainties, a sentiment shared by many investors worldwide.
Additionally, Horsley expressed concern for Egyptian families during the financial crisis. He also highlighted Egypt’s current global GDP ranking, dropping from 31st in 2022 to 38th worldwide.
Egypt Central Bank Raises Deposit Rates
Amid economic challenges, the Central Bank of Egypt (CBE) implemented aggressive measures, raising overnight lending and deposit rates to 28.25% and 27.25%, respectively, to curb record-level inflation. This move aims to address the record high inflation levels causing difficulties for millions of Egyptians. Furthermore, the CBE, according to a Reuters report, signaled a shift toward market-determined exchange rates, in line with IMF recommendations.
Egypt’s international bonds initially rose in anticipation of an IMF agreement but retraced some gains. Longer-dated bonds saw a significant increase, reflecting diminishing optimism among investors against uncertainties. Central bank governor Hassan Abdalla emphasized their commitment to ensuring stability amid market fluctuations by assuring the public of their ability to intervene when necessary.
Despite the challenges, Egypt remains hopeful about foreign investments. A recent $35 billion deal with the United Arab Emirates (UAE) is among these investments. The country believes that such foreign inflows will revitalize its economy and prevent further depreciation of the exchange rate.
