The national currency strengthened against the dollar as a result of the monetary policy pursued by the new government

Argentines have begun to buy BTC more actively amid the strengthening of the  peso exchange rate

20.03.2024 - 08:35

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3 min

What’s new? Argentine residents began to invest more actively in bitcoin, favoring it over the dollar, which has also long been used as a means of preserving value in the face of the national currency’s 276% inflation. On leading local crypto platform Lemon, the weekly number of BTC purchases approached a 20-month high.

Material by Bloomberg

What else is known? The peso-to-dollar exchange, the main safe haven asset for decades, has lost some of its appeal over the past two months as the dollar’s exchange rate has lost 10% against the peso. While bitcoin has gained nearly 60% against the dollar over the same period.

The Lemon platform conducted nearly 35 000 BTC purchase transactions during the week of March 4-10, double the weekly average of last year. Other major exchanges in Argentina, such as Ripio and Belo, also saw a similar situation. On March 14, BTC hit an all-time high above $73 600.

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One of the main factors contributing to the peso’s strength in recent weeks is the tight control of Argentina’s new president Javier Milei over the amount of money in circulation, while the country’s central bank is rebuilding dollar reserves.

Manuel Beaudroit, executive director of the Belo exchange, noted that the number of transactions to buy stablecoins pegged to the dollar has fallen by 80% since the beginning of the year, while the rise of BTC has attracted more buyers.

He added that users decide to buy bitcoin when they see news of its rate rise, while with stablecoins they are more pragmatic and often use such assets as a means to make payments abroad.

Residents of Argentina own about $200 billion, second only to the United States and Russia, but they have shed some of their dollar savings amid the rise of bitcoin.

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At the same time, the NPO Bitcoin Argentina said reports of cryptocurrency fraud increased fivefold in February. The organization’s lawyers noted that Argentines’ desperate attempts to preserve their savings lead to hasty decisions without risk assessment, making them easy prey for scammers.

At the time of writing the news bitcoin is trading at $63 177 on Binance, having lost 1,11% over the day. The growth since the beginning of the year amounted to 49%.

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