Argentina is going through an economic crisis, which is why many Argentineans favor Bitcoin (BTC) over the Peso to store capital. The intention is to protect their wealth. However, the heavy rush to secure money by buying Bitcoin has led to a rise in the prices of cryptocurrencies.
Interestingly, there are some positive developments in favor of the virtual currencies. To meet the growing demand for Bitcoin, 12 BTC ATMs started their operations in a mall in Buenos Aires recently. Even the number of stores ready to accept cryptocurrency as a mode of transaction is on the rise.
Argentinean investors favor Bitcoin against Pesos
The economy of the country is being devastated. That is the reason investors from Argentina including ordinary people with little knowledge of cryptos are now exchanging pesos for BTC. According to D.H. Taylor, renowned economist and mathematician, “Argentineans are moving in large numbers out of their peso and into a more stable currency, BTC. The numbers being witnessed by the markets in BTC are surging from Argentina. The stability being offered by the digital currency is far greater than the peso and Argentineans are moving in quickly.”
Incidentally, Argentina is one of the wealthiest among Latin American nations. According to economists, the country is facing an economic crisis because investors do not feel assured about the ability of the government to stop the continuous inflation. Also, they feel that the authorities do not have any solution to reduce the effects of the rise in U.S. Federal Reserve interest rates. This interest hikes have strengthened the value of the dollar across the world, with another 25 basis point hike just yesterday, September 26, forcing Argentinean investors to favor Bitcoin against the Peso.
The situation in Argentina continues to worsen
The country raised its rate of interest to 60% for countering the depletion of the peso against the US dollar which at present is more than 50%. The government is in a dilemma failing to come up with a way to get Argentina out of this situation. Just a few days ago, Luis Caputo, the president of the Argentine Central Bank resigned after raising the rate of interest of the country to the highest in recent memory. Even then, the peso continued to bleed.