Due to rising inflation in Argentina, the price of Bitcoin (BTC) also set a new record in the value of the Argentine currency, the Peso.
Since starting the currency crisis in 2018, the exchange rate between the peso and the US dollar has skyrocketed, to 99 percent. In addition, the exchange rate with the main crypto assets has also shot up.
Bitcoin Value Sets a New Record in Pesos
Cointelegraph reports that the exchange rate between Bitcoin (BTC) and pesos (ARS) has crossed 6.59 million ARS per BTC, according to data from Google Finance on April 18, 2023.
Although it has corrected slightly to 6 million ARS per BTC, on a YTD basis the value has increased by more than 100 percent.
The ongoing devaluation of the peso due to the growing inflation rate has made its exchange rate with BTC soar.
According to findings by US-based consulting firm FMyA, Tango's central bank reserves have halved to around US$1.3 billion since 2019.
The risk of devaluation is inevitable, eroding the peso's value, forcing its citizens to seek safe havens in US dollars which are increasingly rare due to high demand in Argentina.
Apart from the US dollar, currencies untouched by the Government and central banks such as Bitcoin and other cryptocurrencies have also emerged as an alternative for Argentines.
Based on data from Coin Dance , there is a figure of nearly US$30 million for weekly peer-to-peer Bitcoin volume in the country. It was a multi-month high on record.
And in a 2022 study revealed that, there are almost 60 percent of Argentinians who believe BTC can be a hedge asset in the long term.
In addition, the US-based crypto exchange Coinbase has also recommended Bitcoin as legal tender in Argentina, or a legal means of payment. It's like what El Salvador did.
Previously, there was a new law proposed by the Ministry of Economy that required citizens' consent to declare their crypto holdings and provided incentives in the form of tax benefits.
Looking at one of the hottest topics in the financial sector today, BRICS and several other countries want to dedollarize and use alternative currencies for international trade.
Whether Argentina is on the waiting list for BRICS members remains unknown.