As Bitcoin’s value hits record highs, Argentines are turning away from the US dollar in a bid to combat their country’s relentless inflation.
Reports from Business Insider reveal a surge in Argentine Bitcoin purchases, reaching their highest level in 20 months.
In the first week of March alone, weekly Bitcoin acquisitions soared to 34,700, doubling February’s figures.
This surge mirrors Bitcoin’s remarkable appreciation, up 73% year-to-date, with a peak exceeding $73,000, albeit currently resting at $63,000.
The recent spike in Bitcoin’s value is attributed to the introduction of the US’ inaugural spot Bitcoin ETFs and anticipation for April’s halving event, making Bitcoin an enticing inflation hedge in Argentina, where inflation stands at a staggering 276%.
Meanwhile, Argentina’s new leadership is striving to avert the nation’s sixth recession in a decade.
Traditionally, the US dollar has been Argentina’s refuge during times of economic turmoil, but the peso’s recent 10% gain against the dollar has diminished its allure.
Even digital currencies tethered to fiat currencies are losing demand, dropping by 60% to 70% during Bitcoin’s price surge.
Notably, during his electoral campaign last year, Argentine President Javier Milei advocated for dollarizing the economy, but since assuming office in December, he has only devalued the official peso-to-dollar rate, citing a prolonged timeline for dollarization.
Bitcoin is increasingly embraced by Argentines as an inflation hedge, with many turning to it as a solution to combat their country’s staggering 276% inflation rate.
