The steep currency devaluation in Argentina has increased the demand for Bitcoin (BTC) as investors run for cover. Data from domestic cryptocurrency exchange Buenbit indicates that Bitcoin is trading at about $11,750, compared with nearly $11,330 on top cryptocurrency exchanges across the world.
An unexpected election loss of ruling President Mauricio Macri in the primary elections triggered the Argentine peso (ARS) sell off earlier this week, resulting in a premium for Bitcoin, which crossed $12,300 level on Buenbit exchange. Against the greenback, the peso fell to 59, from 45, before consolidating at 53.
Alberto Fernandez, Argentina’s presidential favorite, condemned Macri for increasing short-term debt to alarming levels. In an interview with a domestic TV channel in Buenos Aires, Fernandez said “Nobody believes Macri can pay back the debt. Bond prices indicate investors see the country in default.”
Fernande, however, stated that he does not prefer a debt default. Investors, who are concerned about the outcome of Presidential election scheduled for October, are trying to safeguard their wealth by using Bitcoin as a hedge against probable risk. Notably, trade volumes on Local Bitcoins, a P2P exchange, is also on the rise.
Anthony Pompliano, co-founder of Morgan Creek Digital, stated that the peso could become the first in a series of fiat currencies which will disintegrate.
Pompliano tweeted “Could this be the first of many to be exposed in a currency crisis?”
Bitcoin adoption is taking at a rapid pace, albeit unexpectedly, in Latin America, with Venezuela leading other nations due to high inflation and economic crisis.
The ripple effect is seen in other countries as well, with Bitcoin gaining adoption while interest in fiat currency declines. Earlier in 2019, investor Tim Draper voiced his support for Bitcoin and forecast a rally when he met Mauricio Macri.
