Bitcoin Trade Volume Surges in Argentina Amid High Inflation, Protests, and Budget Cuts

Bitcoin, News

The Argentinean economy is disintegrating is a fashion reminiscent of the 2001 crash where the public, finally having had enough, coined the slogan “que se vayan todos” (“Kick them all out”). While Argentina has yet to reach this level, there are multiple indicators that this is where it is heading, and this has resulted in increased bitcoin trade volume in the country.

Ominous signs for the Argentine economy

Argentina is no stranger to economic crises, and 2001 saw the country default on over USD 100 Billion worth of debt. It has been described as a continuing economic disaster, but however bad they might be, they are getting worse. September 25th saw mass protests where private industry ceased to function and banks, public transport, schools, and universities closed. At the time, President Macro was in talks with the IMF to secure a larger bailout than previously agreed.

Inflation is running at 42% annualized, the country’s debt is 70% of GDP, interest rates have been hiked to 60%, unemployment is at 10%, and the currency has been devalued from 18 Argentinean Pesos per US Dollar to 40. What this means on a practical level is that poorer (and even middle-class) families are not able to afford basic amenities such as electricity, gas, or food, the price of which has drastically increased. Food prices alone have increased by 30% this year.

Austerity measures are in place, and President Macri is slashing the budgets of various departments across the board, particularly scientific research. Investors are becoming concerned that Argentina could soon default on its debt, but the country is on good relations with the IMF and is being granted record bailouts. The IMF has agreed that some of the money can be used to back up the budget and not just to protect the Peso. Further, when the previous default occurred, unemployment was at 20%, double its current figure.

Bitcoin trade volume increasing in collapsing economies

A trend that is emerging that is different is that residents can and are turning to alternative currencies. Venezuela is the most obvious example of this, with DASH and BTC usage increasing drastically. In Turkey, an impressive 18% of the populace hold or trade cryptocurrency. The first two weeks of September saw records broken in Peru for bitcoin trade volume. The Philippines is also seeing huge volume increases.

And in Argentina, bitcoin trade volume is at all-time highs. According to data from Coindance, tracking Argentinean Pesos (ARS) to BTC on crypto platform Local Bitcoins, the week of September 8th was the highest on record with nearly 7,000,000 ARS traded. The following week of September 15th was the second highest with 6,157,000.

The first cryptocurrency ATM has recently been installed in Argentina, a possible sign of cryptocurrency adoption in a nation that seems to be heading head first into economic collapse. Argentina is now the worlds’ second riskiest sovereign borrower aside from its Venezuelan neighbor.

Digital Nomad with an interest in Zen and Blockchain technology.

Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.

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