Bitcoin marks a new all-time high in Argentina and more than 10 countries

Key facts:

Argentina has an inflation of 290%, so bitcoin is a refuge to protect savings.
The “crypto dollar” registers increases due to rumors that warn of another devaluation of the peso.

The price of bitcoin (BTC) reached its historical maximum (ATH) in the Argentine currency, after the rise that was recorded this Monday, May 20 and that is still maintained. This rise in values also occurs in the midst of a devaluation of the Argentine peso against the US dollar.

The digital currency created by Satoshi Nakamoto surpassed the $71,000 barrier, days before knowing whether the United States Securities and Exchange Commission (SEC) finally approves the ether ETF (ETH), the native cryptocurrency of the Ethereum network, in USA. These rumors increase the trading volume in this digital asset market and could attract greater liquidity and more institutional investors.

Likewise, large economic groups such as Morgan Stanley, JP Morgan or the Wisconsin State Investment Fund (USA), continue to make million-dollar investments in bitcoin ETFs.

The strong momentum led BTC to reach new highs against several other fiat currencies as in the case of Argentina. This is seen in the chart provided by TradingView:

Tether (USDT) quote in Argentine pesos. Source: TradingView

According to the platform, this Tuesday it recorded a new record ATH and surpassed the barrier of 83 million Argentine pesos. In this way, he surpassed the maximum that was recorded in March of this year, when he reached 78 million.

Why does this increase occur in Argentina?

In recent days, the “crypto dollar” has skyrocketed again, after the Central Bank made official a new reduction in interest rates, from 50% to 40%. Likewise, rumors warning of a new devaluation of the currency are increasingly stronger.

As a consequence of this rate cut, small and medium investors once again bet on the dollar as a tool to take care of their savings.

In this framework, both President Javier Milei and his Minister of Economy, Luis Caputo, flatly denied these versions and ruled out a more expensive real exchange rate, in their eagerness to lower inflation and maintain the fiscal and financial surplus.

At the time of publication of this note, the “crypto dollar” is trading at $1,195 for sale, a price that barely exceeded the $1,038 at the beginning of February.

The adoption of bitcoin and cryptocurrencies grows in Argentina

As reported by CriptoNoticias, Argentina is the Latin American country that leads the adoption of bitcoin and cryptocurrencies, with averages of more than USD 85 billion in crypto assets traded until mid-2023.

This behavior reflects that Argentines bet on these assets to protect their savings from annual inflation that is greater than 270%.

According to a Bitso report, Argentina is the only country in the region where more than half of cryptocurrency purchases are in “crypto dollars”, surpassing BTC, contributing 60% and 13%, respectively, of the total purchases.

“High inflation rates create an incentive for consumers to look for safe and fast options to protect their money from devaluation. For this reason, Argentina is the only country where Bitso operates in which the purchase of crypto dollars is almost five times that of bitcoin.”

Julián Colombo, General Director of Bitso Argentina.

For its part, the Lemon exchange, through a report sent to CriptoNoticias, reported that as BTC approaches its issuance limit and consolidates itself as a long-term reserve of value, Argentines show greater interest in its acquisition and accumulation (a fact that follows the trend worldwide).

The survey, in turn, highlights: “From the last quarter of 2023 to date, the amount of BTC guarded by Lemon rose by 22%. With the current price of the asset, this represents an increase of 300% in dollars.”