The surge in demand for Bitcoin in Argentina has reached its highest point in two years, driven by the continuous depreciation of the South American country’s local currency against the dollar.
CoinTelegraph reports that over the past year, the Argentine peso has experienced a four-fold decline in value against the US dollar, dropping from 0.0049 USD per ARS in March 2023 to 0.0012 USD currently.
In response to this economic instability, Argentinians are increasingly turning to Bitcoin as a means to preserve their savings and hedge against the devaluation of their local currency, resulting in the country recording its highest demand for Bitcoin in 20 months.
Crypto exchanges popular in Argentina, such as Lemon Cash, Ripio, and Belo, have all reported a significant surge in Bitcoin demand. Manuel Beaudroi, CEO of the digital wallet Belo, noted that purchases of stablecoins in Argentina have declined from 70% to 60% as Bitcoin’s recent price surge has attracted more interest.
He explained that users opt for Bitcoin when they perceive its value is rising, while stablecoins are often used for practical transactional purposes.
Furthermore, Manuel confirmed a tenfold increase in the demand for Bitcoin and Ether in 2024 compared to the same period last year. Despite perceived low interest in stablecoins, reports suggest that some Argentinians are covertly trading them through black market exchanges known as “Crypto caves” to circumvent strict currency controls and the plummeting value of the Argentine peso.
In addition to increased demand for Bitcoin as a store of value, its usage in settling transactions is also growing in Argentina. In December 2023, Diana Mondino, the minister of foreign affairs, international trade, and worship, announced that recent economic reforms and deregulation efforts would permit the use of cryptocurrencies for certain transactions in the country. An example cited is landlords accepting rent payments in Bitcoin from tenants.
Moreover, Crypto has emerged as a prominent aspect of Argentina’s side job economy, with many working-class individuals seeking foreign gigs that pay in cryptocurrencies. This trend underscores the growing adoption and integration of digital assets into various aspects of daily life in Argentina amidst economic uncertainties.
