Bitcoin price hits new record high in Argentina
Last week, the price of Bitcoin (BTC) hit a record high in Argentine peso (ARS) following persistent inflation in Argentina.
Argentina’s inflation pushes BTC’s price to an all-time high
On April 18, the BTC to ARS rate crossed 6.59 million ARS, according to aggregated price data tracked by Google Finance.
Since the peak, the rate has corrected to around ARS 6 million, down 9%, but still up more than 100% year-to-date (YTD).
Bitcoin’s growth in the Argentine markets coincides with the continuous ARS devaluation. For example, traders paid 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 US-based consultancy, noted that Argentina’s central bank’s reserves have fallen by half to an estimated $1.3 billion since 2019.
That has raised the risk of further peso devaluation, which has crashed nearly 99% from its currency crisis peak of 330 ARS in 2018. That has led locals to seek refuge in the dollar, which has become scarce due to growing demand in the country.
At the same time, Bitcoin and similar cryptocurrencies that operate outside the responsibility of authorities and central banks are increasingly emerging as alternatives. Data shows, for example, that Bitcoin’s weekly peer-to-peer volume in Argentina reached a record high of nearly $30 million in March on the Paxful exchange.
A 2022 study also found that nearly 60% of Argentines believe in Bitcoin’s ability to safeguard the value of their savings over the long term. The popular American cryptocurrency exchange Coinbase also recommends that BTC become legal tender in Argentina.
Bitcoin wins 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 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 required citizens to declare their crypto holdings and incentivized them with tax benefits. In December 2022, an Argentine province announced its intentions to issue a dollar-backed stablecoin.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making a decision.
