Last week, the price of Bitcoin (BTC) reached a record high in Argentine Pesos (ARS) terms following persistent inflation in Argentina.
Argentina’s inflation pushes BTC 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 a dollar note from the black market on April 24 — more than double the official spot rate that pays 220 ARS for the dollar.
FMyA, a U.S.-based consultancy firm, notes 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 that’s becoming scarce due to rising demand i the country.
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 als recommends BTC becomes 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 for the May debut. 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: https://cointelegraph.com/news/bitcoin-price-hits-new-record-high-in-argentina
