Bitcoin price hits new record high in Argentina

Bitcoin price hits new record high in Argentina

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

According to aggregated pricing data collected by Google Finance, the BTC-to-ARS conversion rate surpassed 6.59 million ARS on April 18.

Since the peak, the rate has fallen to roughly 6 million ARS, a 9% decrease but still a year-to-date (YTD) increase of more than 100%.

Bitcoin price hits new record high in Argentina Forks Daily
BTC/ARS price performance so far in 2023. Source: Google Finance

The rise of Bitcoin in Argentine markets corresponds to the ongoing depreciation of the ARS. On April 24, for example, merchants were paying as little as 460 ARS to acquire a dollar on the underground market – more than double the official spot rate of 220 ARS.

According to FMyA, a US-based consultancy business, the Argentine central bank’s reserves have fallen by half to an estimated $1.3 billion since 2019.

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This has increased the likelihood of future peso depreciation, as the peso has fallen about 99% from the currency crisis apex of 330 ARS in 2018. As a result, locals have sought refuge in the dollar, which has become scarce due to rising demand in the country.

Bitcoin price hits new record high in Argentina Forks Daily
ARS/USD price performance since 2004. Source: Google Finance

At the same time, Bitcoin and other cryptocurrencies that operate beyond the purview of governments and central banks are emerging as viable alternatives. According to data from the Paxful exchange, Bitcoin’s peer-to-peer weekly volume in Argentina reached a record high of roughly $30 million in March.

Bitcoin price hits new record high in Argentina Forks Daily
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.

Read also: How to buy or sell Bitcoin without using a centralized crypto exchange?

Bitcoin gaining traction in Argentina

Earlier this month, Argentina’s securities regulator, the National Commission of Value (CNV), approved the launch of a Bitcoin-based futures index on the Matba Rofex exchange in May. The peso-denominated derivative will allow accredited investors to gain exposure to the Bitcoin markets.

Read also: Australia installs more Bitcoin ATMs than the whole of Asia

Furthermore, a recent bill presented by the Ministry of Economy required residents to report their crypto holdings and rewarded them with tax breaks. In addition, an Argentine province announced plans to create a dollar-backed stablecoin in December 2022.

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