Argentina Pumping Millions in Bitcoin Amidst Currency Collapse & Economy Slump
Argentina is back in bitcoin.
More than 100 million Argentine pesos worth of BTC were also trading on peer-to-peer cryptocurrency trading platform, LocalBitcoins.
The last peak was made in the early weeks of May 2020 at 69 million Argentine pesos. The first week of June also saw 67 million Argentine pesos traded for bitcoin on LocalBitcoins, as per CoinDance.
However, unlike the ATH put in fiat currency, only 92 BTC was traded in the first week of July. The highest was seen in March 2016 at 228 BTC, around the same level of volume was recorded in February 2015.
So much difference was the result of devaluation in argentine pesos. Currently, 1 USD is worth 70.94, down from 42 pesos per dollar in July 2019 and 20 pesos per dollar in April 2018.
Analysts forecast the average exchange will reach 88 pesos per dollar in December 2020 and 122.5 in Dec. 2021. President Alberto Fernandez’s government has also tightened currency controls making it difficult to exchange pesos for dollars.
Because of the currency devaluation, the value of one Bitcoin is $15,200, as per Cryptomkt.
More than 2.6 million Argentine pesos worth of BTC were also traded on Paxful in the first week of July. This uptrend was seen throughout 2020, which started from 80.8k Argentine pesos. In terms of Bitcoin, however, it only amounted to 2 BTC, which used to be below 1 BTC until last month.
Argentines are investing in Bitcoin after the country’s economy plunged more than expected in April during the lockdown to try to stop the spread of the Covid-19 pandemic. The country was already facing the third year of recession in 2020.
Economic activity fell 17.5% from the prior month and 25.4% from a year ago in South America’s second-largest economy. It was the worst decline since 1993 when the government’s statistics agency began publishing monthly data.
The IMF and OECD forecast that the Argentine economy will contract about 10% this year.
Other countries currently seeing a good jump in volume in the past few weeks on LocalBitcoins are Tanzania, Kenya, Nigeria, South America, Dominic Republic, Japan, Egypt, Singapore, and of course, Venezuela.