A unique situation has emerged in Argentina, where citizens are helping Bitcoin demand surge by diversifying into crypto to battle against the increasing inflation in the country.
A recent Bloomberg report shed light on the sharp increase in Bitcoin purchases in Argentina. The country is already battling an inflation crisis, which could have resulted in high Bitcoin demand. Argentineans have resorted to Bitcoin purchases to conserve the value of their money, as the Argentine peso’s value has decreased significantly.
The Bloomberg report’s data came from a crypto exchange in the country. According to the crypto exchange, in the week ending on March 10, 35,000 Argentineans made Bitcoin purchases. The numbers are almost double the previous year’s weekly average. Moreover, a chart in the report denoted that the level of purchases had increased to its highest level in twenty months.
Other wallet service providers and exchanges also stated similar trends. Manuel Beaudroi, who heads a digital wallet service, said Bitcoin purchases had trumped interest in stablecoins.
He noted, “The user decides to buy Bitcoin when they see the news that the currency is going up, while stablecoin is more pragmatic and many times used for transactional purposes, as a vehicle to make payments abroad.” His firm has seen BTC and ETH transactions increase ten times in 2024.
In October 2023, the central bank of Argentina publicly supported the concept of a digital peso. The digital peso project could progress behind the public eye, but the bank has not published any information.
At the same time, Javier Milei, the President of Argentina, is an ardent crypto supporter. Last year, he announced the roll-out of crypto incentives that could aid the country’s economy as well. His incentives focused on crypto taxes for those who declared their holdings.
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