Argentina is experiencing a currency crisis as Peso (National currency) collapses. On early August 12, it was reportedly down 25% against USD and fell even further the same day.
Bitcoin Trades at $12300 in Argentina
The politico-economic crisis in Argentina has given a push to the price of Bitcoin in the country. While the price of the cryptocurrency at press time on Coinmarketcap is $11250, data reveals that it is trading at the premium rate of $12300 in Argentina.
The reason for Bitcoin’s premium price in Argentina is being attributed to the collapse of the beleaguered peso currency. It was down 25% against the dollar on early August 12 but it declined even further plunging 30.3% to a record 65 per US dollar on the same day, as per Reuters. The recent fall of peso in the country comes after the primary election where President Mauricio Marci performed worse-than-expected on Sunday.
WATCH OUT: The Argentine Peso is collapsing. Already down 25% against the USD today. (H/t @jsblokland)
Could this be the first of many to be exposed in a currency crisis? pic.twitter.com/bpv9CGhOs5
— Pomp ? (@APompliano) August 12, 2019
Mauricio lost to Alberto Fernandez but is hoping to win a second term on 27th October in the presidential poll. While these circumstances are becoming the reason for the country’s recession with inflation at over 55% as on August 12, the price of Bitcoin has sruged to $12300 against the US Dollar in Argentina.
According to Camila Russo, who according to her Twitter profile, a Chiefess at the Defiant and former employee at Bloomberg Business, claims that people fear the return of populism as Marci lost in a primary vote. She further reveals that Bitcoin is on the peak in Argentina and people can/are buying dollars freely. However, she adds that, “few are still choosing Bitcoin as a store of value”.
Bitcoin is surging in Argentina, trading at ~$12,300 on @buenbit, a premium versus ~$11,400 on Coinbase, where it's having a relatively quiet day. There's a bloodbath in argie markets today after Macri lost in a primary vote and people fear the return of populism. (1/2) pic.twitter.com/EJdqATZn8L
— Camila Russo (@CamiRusso) August 12, 2019advertisement
Peso Collapsed Overnight – Bitcoin Becoming Store of Value
The premium rate of Bitcoin in Argentina is no surprise with the ongoing crisis across the country. However, an Argentine Alex Kruger who is also a cryptocurrency trader notes that Argentines are buying dollars to protect themselves against the peso losing value. He took to Twitter and wrote –
Before bitcoiners start using Argentina (my country) as excuse to yell "Buy Bitcoin" and generate clicks and sell newsletters.
Argentines want to protect themselves against the peso losing value versus the dollar. And for that, they buy dollars.
— Alex Krüger (@krugermacro) August 12, 2019
Being an Argentine, Alex explains the country’s situation and bitcoin price as follows;
I do believe everyone should have bitcoin. Argentines in particular. I am openly bullish bitcoin for multiple reasons. However, I don’t think it is right to use a national tragedy to fabricate uninformed narratives.
While responding to user’s comment on how should Argentines protect themselves against the losing peso, Alex quickly remarked that “that’s entirely a different story” but there’ not much crypto education in Argentian, he said.
I’d wager that on average people are much more informed about bitcoin in the USA than in Argentina, and hold more bitcoin per capita. There definitively is through an outsized developer community in Argentina, inspired by the Argentine monetary mess, Alex explained.
In a nutshell, people, in countries like Argentina which is experiencing a currency-crises, are routing towards Bitcoin and even considering it as a “store of value”or a “safe heaven” asset. However, Bitcoin’s regulatory framework in countries including Argentina is still unclear because global regulators view crypto industry as a threat to traditional financial markets.