Bitcoin Price Surges in Argentina as the Country Faces Hyperinflation
The price of Bitcoin has literally exploded in Argentine Peso (ARS). This April 26th, 2023, it surpassed 6.6 million pesos. While in US dollars, Bitcoin is still far from its ATH (all-time high) of $69,000 in November 2021, this is not the case in the Argentine currency. Indeed, BTC is getting closer and closer to its November 2021 “Argentine ATH” at 6.9 million pesos.
Unfortunately, inflation is once again taking its toll on Argentina. If in the summer of 2022, this depreciation of the Argentine peso had already made stablecoins a success, this time it is Bitcoin (BTC) that takes off in the country. The king of cryptocurrencies confirms its role as a safe haven.
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Argentina sees inflation derail at over 100%
Is this a sad law of series? In any case, Argentina is once again experiencing a serious economic crisis. In this South American country, inflation has become more than galloping. It has already reached the symbolic +100% over a sliding year.
Let’s remember in passing that the International Monetary Fund (IMF) had expressly demanded, in March 2022, that the Argentine government “discourage the use of cryptocurrencies” in return for its aid. A year later, it can be seen how effective this aid has been, which will have caused a severe slowdown in the adoption of cryptocurrencies in the country.
Since then, the price of Bitcoin has literally exploded in Argentine Peso (ARS). This April 26th, 2023, it surpassed 6.6 million pesos. While in US dollars, Bitcoin is still far from its ATH (all-time high) of $69,000 in November 2021, this is not the case in the Argentine currency. Indeed, BTC is getting closer and closer to its November 2021 “Argentine ATH” at 6.9 million pesos. Bitcoin prices are exploding while Argentina’s fiat currency is collapsing.
Bitcoin as a safe haven in the face of inflation?
During the recent banking crisis initiated by the failure of Silicon Valley Bank (SVB), Bitcoin followed gold higher, while the equity markets (especially banking) plunged into the red. If one could doubt it until now, the king of cryptocurrencies has, this time, really behaved as a safe haven.
Argentinians seem to share, at least in part, this opinion in the face of the depreciation of their national fiat currency. Indeed, we notice that – even taking into account the high inflation of the country – the volumes of bitcoin exchange have increased significantly in recent weeks. The example below concerns peer-to-peer exchanges via Paxful.
Argentines turn to Bitcoin in the face of rampant inflation in their country
South American nations, such as Brazil and Argentina, are trying to join forces to fight together against the recurring inflation in this subcontinent. A common currency project, for example, is being discussed. Will they follow the example of their little Central American brother, El Salvador, which has adopted Bitcoin as legal tender? One thing is certain: the issuance of BTC over time will be deflationary, unlike a state fiat currency that is very (too) often printed unreasonably (which is the primary cause of inflation).
(Featured image by André François McKenzie via Unsplash)
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First published in JOURNAL DU COIN, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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