2024-07-24
Bitcoin Global News

Bitcoin price hits new record high in Argentina

Argentina’s peso has crashed by 99% versus the U.S. dollar since the beginning of the currency crisis in 2018.

Last week, the price of Bitcoin BTC $28,904 reached a record high in Argentine peso (ARS) terms following persistent inflation in Argentina.

Argentina’s inflation pushes BTC’s price to all-time high

On April 18, the BTC-to-ARS exchange rate crossed over 6.59 million ARS, according to aggregated price data tracked by Google Finance.

Since the peak, the rate has corrected to around 6 million ARS, down 9%, but still up more than 100% year-to-date (YTD).

BTC/ARS price performance so far in 2023. Source: Google Finance

Bitcoin’s growth in the Argentine markets coincides with the continuous ARS devaluation. For instance, traders were paying as low as 460 ARS to buy $1 from the black market on April 24 — more than double the official spot rate that pays 220 ARS for the dollar. 

FMyA, a United States-based consultancy firm, noted that the Argentine central bank’s reserves have dropped by half to an estimated $1.3 billion since 2019.

That has raised the risks of further peso devaluation, which has crashed nearly 99% from the currency crisis peak of 330 ARS in 2018. That has led locals to seek haven in the dollar, which has become scarce due to rising demand in the country.

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ARS/USD price performance since 2004. Source: Google Finance

At the same time, Bitcoin and similar cryptocurrencies operating outside governments’ and central banks’ purview are increasingly emerging as alternatives. For example, data shows that Bitcoin’s peer-to-peer weekly volume in Argentina reached a record high of nearly $30 million in March on the Paxful exchange.

Bitcoin weekly volume in Argentina. Source: Paxful/CoinDance

Also, a study in 2022 found that nearly 60% of Argentines believe in Bitcoin’s ability to safeguard the value of their savings in the long term. Popular U.S. cryptocurrency exchange Coinbase also recommends BTC become a legal tender in Argentina.

Bitcoin gaining traction in Argentina

Earlier in April, the National Commission of Value (CNV), Argentina’s securities regulator, approved a Bitcoin-based futures index on the Matba Rofex exchange set to debut in May. The derivative, settled in pesos, will enable accredited investors to gain exposure to the Bitcoin markets.

Related: Latin America is ready for crypto — Just integrate it with their payment systems

In addition, a recent bill proposed by the Ministry of Economy asked citizens to declare their crypto holdings and incentivized them with tax benefits. Also, in December 2022, an Argentine province announced its intentions to issue a dollar-backed stablecoin.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Source : Cointelegraph.com