Argentinean inflation of 276% is fueling a Bitcoin purchasing frenzy; the first week of March saw the greatest single-week purchase of 34,700 BTC in 20 months.
Bitcoin is becoming a haven for Argentinians fleeing the country’s crippling inflation and economic uncertainty; new numbers show a dramatic uptick in Bitcoin purchases.
The recent rapid rise of Bitcoin, which has surpassed the performance of more conventional inflation hedges like the dollar, has coincided with this pattern.
Bloomberg reports that weekly Bitcoin purchases in Argentina hit a 20-month high of 34,700 in the first week of March, the biggest amount witnessed in the nation to that point. This increase proves that Bitcoin is becoming more popular in Argentina, since its value has doubled since early February.
Bitcoin has experienced significant appreciation as a hedge against inflation, with its value reaching an all-time peak of over $73,000 and increasing by as much as 73% year-to-date. Some have speculated that the impending halving event in April and the debut of the first spot Bitcoin exchange-traded funds (ETFs) in the United States are to blame for this increase.
The peso, Argentina’s national currency, has lost value due to the country’s current 276% inflation rate; thus, people are looking for other ways to deposit their money. In times of economic uncertainty, the U.S. dollar has long been Argentina’s go-to currency. But the beauty of the dollar has faded due to the peso’s recent rise and the government’s attempts to stabilize the currency.
The government of President Javier Milei has been working to clean up the balance sheet of the central bank as part of its attempts to solve economic issues. Milei ran on the platform of quickly dollarizing Argentina’s economy, but since becoming president, he has instead prioritized controlling the peso’s value. Additionally, he has implied that complete dollarization is still very far off.
Digital tokens linked to real-world currencies, such as USDT and USDC, have seen their demand fall as Bitcoin has become more popular as a means to protect against inflation and economic instability.
Residents of Argentina have difficulties saving and managing their finances due to the country’s history of economic volatility, which is characterized by repeated currency devaluations. The country’s desire to escape the consequences of the peso depreciation, rising inflation, and restrictions on accessing other currencies has boosted interest in cryptocurrencies.
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