Argentines abandon dollars for Bitcoin to tackle inflation

Argentines are abandoning the US dollar in favour of Bitcoin as the cryptocurrency’s value reached an all-time high this month.

The trend persists as Argentines search for a solution to the country’s accelerating inflation.

According to Business Insider, Argentine purchases of Bitcoin jumped to their highest weekly level in 20 months.

In the first week of March, the number of weekly Bitcoin purchases in the country increased to 34,700. That was more than double the number of buyers in February.

This uptick aligns with Bitcoin’s significant appreciation in recent months, climbing up to 73 per cent year-to-date and peaking at an all-time high of over $73,000. However, the present value stands at $63,000.

The recent price gain by Bitcoin is heavily influenced by the US’ first spot Bitcoin ETFs and excitement for April’s halving event. This has made Bitcoin an attractive hedge in Argentina, where inflation remains at a whopping 276 per cent

The new leadership of the country is fighting to prevent the country from sliding into its sixth recession in a decade.

The US dollar has been the go-to currency for Argentines in times of high inflation and instability, especially as the country’s economic woes often deteriorate the value of the peso.

The dollar has become widespread in Argentina and is even used to pay company salaries and Airbnb rentals.

However, over the last two months, the peso has gained 10 per cent on the dollar, reducing the appeal for the US dollar in the country.

Like the dollar, there is also a decline in demand for digital currencies tied to real-world currencies. Demand for Such digital tokens declined by 60 per cent to 70 per cent during Bitcoin’s price surge.

Recall that last year, Argentine President, Javier Milei, during his electoral campaign sold voters on the promise of dollarising Argentina’s economy.

However, since taking office in December, he has only devalued the official peso-to-dollar, saying it will take a long while before dollarisation becomes approachable.

Bitcoin is increasingly seen as a hedge for inflation around the world and Argentines are increasingly buying into it to fight the enormous 276 per cent inflation in their country.