Argentina is experiencing a period of great economic turbulence and the Argentine Peso (ARS) has promptly activated a devastating devaluation mode. Although Bitcoin has seen a steep price drop over the past days, its popularity and value in Argentina keep increasing overwhelmingly.
Bitcoin Laughing Best In Argentina As Government Battles Debt
The economic unrest in Argentina is encouraging local investors to pay extra (a premium) for Bitcoin, as the pace-setter digital currency proves to be nothing short of a “safe haven” for everyone else than promoted.
At present, in Argentina, where the peso crashed fatally, the event of which proceeded an election uncertainty, Bitcoin is trading for as much as $10,300 on LocalBitcoins.com, a peer-to-peer platform, which represents about ten percent (10%) higher than on various international cryptocurrency exchange platforms. Since Argentina’s economic unrest, the peso has fallen about fifty percent (50%) against bitcoin and up to ten percent (10%) against the US dollars.
The premium, at best, would seem to affirm the notion that Bitcoin is a means of securing assets from fluctuating in local currencies, the peso in this case and authoritarianism. Although the cryptocurrency has tumbled about 8% to around $9600 this week according to statistics on coin market cap, elevating the risk for investors in crisis infested nations of alternating between volatile assets.
How Will This Affect Bitcoin Price?
Now, in efforts to combat the crisis and prevent further devaluation of the peso, according to the International Monetary Fund, the government has expressed readiness to open negotiations with international investors and the International Monetary Fund (IMF) over the maturity of its bonds.
According to the IMF’s Chief Spokesperson Gerry Rice,
“Regarding the debt operation announced by the Argentine authorities today, Fund staff is in the process of analyzing them and assessing their impact. The staff understands that the authorities have taken these important steps to address liquidity needs and safeguard reserves.
“Staff will remain in close contact with the authorities in the period ahead and the Fund will continue to stand with Argentina during these challenging times.”
If things go well during such negotiations, the peso might begin to gain value again little at a time. However, the fear of a recovering local currency “relapsing” is also a possibility which might mean that investors either take longer time to believe in the uprising or better still, slash investments between bitcoin and peso. Whichever way, the situation may still eventually favor bitcoin and its premium price might remain for longer than even expected.