Argentines are ditching the US dollar and are increasingly opting for Bitcoin as the coin price reached a record high this month.
This pattern continues to reoccur as the country’s citizens seek a remedy to the never-ending inflation in the country.
According to Business Insider, Argentine purchases of Bitcoin jumped to their highest weekly level in 20 months.
In the first week of March, the number of weekly Bitcoin purchases in the country increased to 34,700. That’s more than double the number of buyers in February.
It follows as bitcoin has gained sharply in recent months, rising as much as 73% year-to-date and hitting an all-time of over $73,000. Although the current price is $63,000.
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The recent price gain by Bitcoin is heavily influenced by the US’ first spot bitcoin ETFs and excitement for April’s halving event. This has made Bitcoin an attractive hedge in Argentina where inflation remains at a whopping 276%.
The New leadership of the country is fighting to prevent the nation from sliding into its sixth recession in a decade.
The US dollar has been the go-to currency for Argentines in times of high inflation and instability especially as the country’s economic woes often deteriorate the value of the peso.
The dollar has become widespread in Argentina and is even used to pay company salaries and Airbnb rentals.
However, over the last two months, the Peso has gained 10% on the dollar reducing the appeal for the US dollar in the country.
Like the dollar, there is also a decline in demand for digital currencies tied to real-world currencies. Demand for Such digital tokens declined by 60% to 70% during Bitcoin’s price surge.
What to Know
- Last Year, Argentine President Javier Milei during his electoral campaign sold voters on the promise of dollarizing Argentina’s economy. However, since taking office in December, he has only devalued the official peso-to-dollar rate saying it will take a long while before dollarization becomes approachable.
- Bitcoin is increasingly seen as a hedge for inflation around the world and Argentines are increasingly buying into it to fight the enormous 276% inflation in their country.