Bitcoin and stablecoin: Argentinians are seeking at all costs to escape the agony of the peso


Safe haven par excellence. While in Europe or the United States the notion of a safe haven is sometimes simply theoretical, in Argentina, it takes on its full meaning while the national currency has been undergoing a slow descent into hell for several years. The peso has lost 75% of its value against the greenback over the last twelve months and the population is seeking by all means to save what can be saved. Under these conditions, Bitcoin and stablecoins appear to be a pragmatic solution to limit damage and local exchanges are recording record purchase volumes. Direction Buenos Aires to take stock of the situation.

Stablecoins are still popular, but through less official channels

L'Argentina has become in a few years a sort of open-air laboratory for evaluating the interest of Bitcoin in a situation of monetary crisis. Two (or three) digit inflation of basic products, catastrophic drop in the value of the currency, frozen salaries, Argentines are facing a major economic crisis and despite the announcements of the newly elected President Milei, things are slow to improve. arrange. In this largely unfavorable context, the population turned to a solution that was available and accessible immediately: cryptocurrencies.

Among them, Bitcoin and stablecoins of course attract the vast majority of capital. So-called stable currencies indexed to the American dollar are popular with Argentines who use them to international transfers as well as to escape the volatility of Bitcoin, which can sometimes worry savers looking for stability. To avoid strict control by the authorities, what we call there “crypto caves” are very successful, these kinds of platforms peer to peer allow anyone to buy and sell USDT, USDC and other stablecoins without declaring it to anyone.

The Argentine peso has lost 75% of its value against the US dollar over a year and continues to fall.  It went from $0.0049 to $0.0012 in twelve months!!The Argentine peso has lost 75% of its value against the US dollar over a year and continues to fall.  It went from $0.0049 to $0.0012 in twelve months!!
Value of the Argentine peso against the US dollar for a year – Source: Google finance

Demand for Bitcoin has exploded in Argentina in recent months amid the currency crisis

But, thanks to the recent rise in its price, Bitcoin is back in favor in Argentina where local crypto platforms are realizing record sales. As we can see in the graph below, the Lemon exchange, for example, recorded 35,000 bitcoins sold in the second week of March, double the number of the previous year for the same period. We also notice that sales have started to increase significantly since the month of December 2023i.e. the start of the resumption of the upward movement on the first crypto on the market.

Argentinians have been buying a lot of bitcoins since the upward movement resumed in early December 2023. In the second week of March, more than 35,000 bitcoins were sold by the Lemon platform. Argentinians have been buying a lot of bitcoins since the upward movement resumed in early December 2023. In the second week of March, more than 35,000 bitcoins were sold by the Lemon platform.
Number of bitcoins sold (in thousands of units) by the Lemon platform over the past year, each column represents a week – Source: Lemon taken by Bloomberg

Other leading crypto exchanges in the country have reported similar trends and Manuel BaudroiCEO of Belo, explained to the specialized press that purchases of stablecoins had also collapsed by 60 to 70% since the recent surge in the price of Bitcoin:

“The user decides to buy Bitcoin when he learns that the price of this currency is increasing, while the stablecoin is more pragmatic and it is often used for transactional purposes, as a means of making payments abroad For example. »

Manuel Baudroi, CEO of Belo – Source: Cointelegraph

While the population is stocking up on bitcoins and stablecoins, the new government continues to open the economy to cryptocurrency, even if local political constraints are slowing down the implementation of certain measures. President Milei does not have a majority in Parliament and he will have to convince the rest of the national political actors of the interest of these alternatives to the Argentine peso. During this time, the population has clearly understood the issues and has already taken the lead.

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