The article aims to reveal that the relationship of the bitcoin-derived exchange rate with the inflation level in a crisis-driven economy allows the citizens to use bitcoin as a “survival” asset. We analyse data on bitcoin transactions in local currencies of selected African economies (Ghana, Kenya, Nigeria, and South Africa) up to January 2021. Based on the bitcoin data, we derive the unofficial exchange rate for each country and compare it to the official one. We show that in countries of high inflation, the discrepancies between the two rates may be so high that it is impossible to establish even a long-term relationship between them. Moreover, the difference between the monthly-averaged bitcoin-derived and official rate positively relates to inflation in the same month. It suggests that the citizens may utilise bitcoin money-like properties to overcome the consequences of high inflation, buying bitcoin for local money and selling for US dollars instead of using the direct exchange rate or simply using bitcoin to store their wealth.

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Keywords

bitcoin; Africa; money; exchange rate; inflation