The economic crisis in Argentina is driving investors to buy Bitcoin in order to protect their wealth, pushing the cryptocurrency’s price higher in-turn. In parallel, to satisfy the increasing demand, the first of 12 Bitcoin ATMs has already begun to operate in a Buenos Aires mall. The number of stores accepting Bitcoin also continues to rise.
Bitcoin Is a Safe-Haven During an Economic Crisis
As the country’s currency plunges, Argentinian investors and ordinary people are exchanging their pesos for Bitcoin (BTC) [coin_price]. In this regard, economist and mathematician D.H. Taylor writes,
“Argentinians are moving in large numbers out of their peso and into a more stable currency, BTC. The numbers being witnessed by the markets in BTC are surging from Argentina.” And he adds, “The stability being offered by the digital currency is far greater than the peso and Argentinians are moving in quickly.”
As for substantiating evidence, Taylor refers to the chart below showing the weekly volume of Bitcoin purchases in Argentina:
Most economists agree that the devaluation of the peso is due to investors’ doubts about the government’s ability to contain its unrelenting inflation and to minimize the effects of the U.S. Federal Reserve interest rate increases, which have strengthened the dollar all over the world.
Now, the Argentina year-over-year inflation rate reaches over 34 percent.
Taylor: The Biggest Solution is Bitcoin
So far, the efforts of Argentina’s Central Bank to stabilize the peso have been to no avail. As a result, according to Taylor, the Central Bank is exploring the possibility of diversifying into Bitcoin,
The biggest solution is Bitcoin, or BTC-USD and, according to the data, Argentinians are buying large amounts. At the same time, the Argentinian Central Bank is considering diversifying their currency reserves into BTC.
The Central Bank has already eased regulations regarding ATMs in the country. This easing of regulations has facilitated the installation of ATMs processing cryptocurrencies.
On September 19, 2018, Athena Bitcoin installed the first ATM designed to exchange the cryptocurrency in a mall, auguring that these machines will soon mushroom in Buenos Aires.
Indeed, according to Matias Goldenhorn, Athena Bitcoin Director for Latin America, 12 ATMs will soon be installed in the capital city. These units will operate with Bitcoin as well as other cryptocurrencies such as Litecoin, Ethereum, and Bitcoin Cash.
On the other hand, a variety of merchants are already accepting Bitcoin as payment. Taylor also highlights that “8,000 new Bitcoin pay stations are in convenience stores in Argentina.”
For example, La Nación recently reported that a butcher shop in Cordoba city is now accepting Bitcoin.
What solutions can Bitcoin provide to soften Argentina’s severe economic crisis? Let us know in the comments below.
Images courtesy of Pixabay, Infobae.