Bitcoin Demand in Argentina Reaches Two-year High
22 Mar, 2024 ● Crypto News
In an attempt to protect their savings from the depreciating Argentine peso, Argentinians have significantly increased their Bitcoin purchases, reaching a 20-month peak in demand, as indicated by a recent analysis.
Bloomberg, on March 20, cited data from the crypto exchange Lemon Cash, which showed that around 35,000 Argentinians bought Bitcoin in the week leading up to March 10, marking a twofold increase from the weekly average of 2023.
The surge in Bitcoin buying activity from January 2023 to March 2024 is attributed primarily to the declining value of the Argentine peso.
Over the last year, the peso has significantly devalued against the US dollar, moving from $0.0049/peso in March 2023 to $0.0012/peso at the current rate.
Lemon Cash is not the only platform experiencing an uptick in Bitcoin interest. Competing exchanges in Argentina, such as Ripio and Belo, have observed similar patterns.
Manuel Beaudroi, the CEO of Belo, noted a shift in consumer preference from stablecoins to Bitcoin, with stablecoin purchases dropping from 70% to 60% amidst Bitcoin's price increase.
He said: “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.”
Beaudroi also mentioned that transactions involving Bitcoin and Ether on Belo have increased tenfold in 2024 compared to the same timeframe in the previous year.
Despite the pivot towards Bitcoin, there's still a noted interest in stablecoins, albeit through unconventional means.
Cointelegraph reported on February 12 that Argentinians are turning to underground "crypto caves" to acquire U.S. dollar stablecoins, bypassing strict local exchange controls and the high inflation rate of the peso.
The adaptation of digital currencies for specific uses is gradually becoming more common in Argentina.
In December 2023, Diana Mondino, minister of foreign affairs, international trade and worship, stated that new economic reform legislation would permit Bitcoin and other cryptocurrencies for certain transactions.
Following this policy change, a landmark rental agreement was made in Rosario, Argentina's third-largest city, allowing a tenant to pay their rent in Bitcoin.
Sources:
https://cointelegraph.com/news/argentina-inflation-unofficial-exchange-crypto-caves
https://cointelegraph.com/news/bitcoin-rent-agreement-argentina-landlord-tenant
