The Rise of Bitcoin as a Safe Haven Asset in Argentina
Bitcoin has become the talk of the town in Argentina as residents scramble to protect their assets amidst a staggering 276% inflation rate in February. Instead of hoarding USD like before, Argentinians are actively buying Bitcoin, making it the top investment choice for the people of this country.
The popularity of Bitcoin in Argentina is evident as weekly Bitcoin purchases reached a 20-month high on Lemon, the most popular cryptocurrency exchange for individual customers. As of the week ending on March 10th, there were a total of 35,000 Bitcoin transactions in Argentina. Similar trends were observed on other major exchanges in the country, such as Ripio and Belo.
Notably, the buying volume of Bitcoin and Ether has increased tenfold compared to the previous year, according to Manuel Beaudroit, the CEO of Belo exchange. Meanwhile, the purchase of stablecoins, which are digital currencies pegged to the USD, has decreased by 60-70%. This can be attributed to the attractiveness of Bitcoin’s significant price surge.
“People are choosing to buy Bitcoin when they hear the news that its value is increasing, while stablecoins are seen as more practical and often used for transactional purposes abroad,” Beaudroit explained.
Bitcoin’s price has skyrocketed, reaching a peak of nearly $74,000 per coin in the middle of the month, marking a 73% increase. In contrast, the Argentine peso has strengthened 10% against the USD over the past two months.
Argentina currently faces the highest inflation rate in Latin America, and its citizens are exploring ways to safeguard their assets. With Bitcoin’s growing value, individuals are shifting their savings from the dollar and venturing into alternative investment channels.
As the world watches Argentina’s economic situation closely, Bitcoin has emerged as a safe haven asset that offers potential protection against the country’s high inflation rates. Its decentralized nature and limited supply make it an attractive choice for investors seeking stability in uncertain times.
Reference: Reuters, BI