Argentines are increasingly turning to Bitcoin as a means to preserve their savings in light of the ongoing decline of their national currency, the Argentine peso (ARS). According to a recent report by Bloomberg, the demand for Bitcoin in Argentina has reached its highest point in 20 months. Data from cryptocurrency exchange Lemon Cash revealed that nearly 35,000 customers in Argentina purchased Bitcoin in the week ending March 10, which is double the weekly average compared to 2023.
The decline of the Argentine peso is a major factor driving this increased demand. Over the past year, the value of the ARS against the US dollar has dropped significantly, falling from 0.0049 USD per ARS in March 2023 to 0.0012 USD at the time of publication. As a result, more Argentines are turning to Bitcoin as a store of value.
Lemon Cash is not the only platform experiencing a surge in demand. Other major exchanges in Argentina, such as Ripio and Belo, have reported similar trends. Manuel Beaudroi, the CEO of the digital wallet Belo, noted that stablecoin purchases in Argentina have declined from 70% to 60% as Bitcoin’s recent price surge has attracted more interest. Beaudroi also mentioned that Belo has seen a tenfold increase in volume for Bitcoin and Ether in 2024 compared to the same period last year.
Interestingly, a recent report suggests that interest in stablecoins may still exist among Argentines, but they might be choosing to use black market exchanges, known as “crypto caves,” to purchase USD stablecoins. This is an effort to bypass strict currency controls and the rising inflation of the ARS.
On the other hand, the use of digital currency for specific transactions is slowly gaining traction in Argentina. In December 2023, Diana Mondino, the minister of foreign affairs, international trade, and worship, announced a decree that would allow the use of Bitcoin and other cryptocurrencies in the country under certain conditions. Following this ruling, a local landlord and tenant in Rosario, the third most populated city in Argentina, even signed a rental agreement where the tenant would pay monthly rent in Bitcoin.
As Bitcoin continues to gain popularity in Argentina as a hedge against the declining national currency, it is important to note the potential risks and challenges associated with its use. The use of digital currencies can make platforms like Coinbase vulnerable to hackers and government scrutiny, as highlighted by the CEO of Trezor in a recent interview. Nevertheless, it appears that Bitcoin is becoming an increasingly attractive option for Argentines looking to preserve their savings.