Bitcoin has proven its status as a value-storing currency more than once. Now there is another proof in its function as a crisis-proof cryptocurrency. For while the peso is suffering from inflation in Argentina, the trading volume of Bitcoin is steadily increasing.
The peso has had its day
Since 2018, the Bitcoin trading volume in Argentine pesos has increased by 1028 percent. The weekly trading volume for Bitcoin in terms of the US dollar has since increased by 139 percent. Therefore, it cannot be an artificially increased trading volume due to peso inflation.
On Twitter, market research company Arcan Research reported on April 23rd: „(1/2) Argentinians are dumping record amounts of pesos for #bitcoin on @LocalBitcoins as the government is close to not paying its debts and the currency is suffering from inflation. (Source: @Coin_Dance).“
The domestic currency of the Argentineans was devalued more and more through financial interventions. Accordingly, many Argentinians are desperately searching for an alternative. To protect their own money from the steady devaluation, more and more Argentinians invest their money in Bitcoin.
Will the Argentine economy recover again?
The Argentinean state has debts of 65 billion US dollars. Argentina has failed to make a payment of $503 million that is due on Wednesday. This means the country is heading for national bankruptcy. The largest creditor groups include BlackRock, Fidelity, Ashmore, T. Rowe Price and Wellington Management. According to an article in the Financial Times on April 22nd. Now Argentina has 30 days to negotiate with creditors in order to prevent bankruptcy and to resolve the debt issue again. In the meantime, however, around 500 million US dollars in interest on government bonds have been added to the debt.