Demand for Bitcoin Surges in Argentina on Likely Overseas Debt Default
Bitcoin (BTC) volume in Argentine pesos has increased sharply since the cryptocurrencies came under bear grip in 2018, as the country stares at a likely default on $65 billion overseas debt.
Arcane Research tweeted yesterday indicating that the weekly volume of Bitcoin bought with Argentine pesos has surged 1028% since January 2018.
Nevertheless, the volume generated by BTC and USD has also recorded considerable rise of 407% and 139%, respectively.
The increase is taking place “as the government is about to default on its debt and the currency is suffering from inflation.”
The Argentine government is yet to come up with a plan to reorganize about $65 billion in overseas debt, giving rise to a likely default.
On April 22, Buenos Aires defaulted on $500 million payments for three overseas bonds, sparking speculation about a possible default in mid-May.
(2/2) The volume has increased 1028% in Argentine pesos, 407% in BTC and 139% in USD since the beginning of 2018, showing a substantial growth in real terms as well. pic.twitter.com/BTvH4kKH2P
— Arcane Research (@ArcaneResearch) April 23, 2020
Many South American countries are turning towards BTC. One of the likely reasons could be the outbreak of Covid-19, similar to the scenario in the US.
Argentina’s financial crisis, along with negative impact of coronavirus on the economy, has reached an extreme situation in comparison to other countries, encouraging several people across the globe to shift to cryptocurrencies as a dependable asset unrelated with conventional markets.
Any initiatives taken to stabilize the economy of Argentina can likely cause further deflation of the peso.
It can be remembered that the CEO of crypto based lending platform Celsius Network has rightly stated “A bet on Bitcoin is a bet that the deflationary pressures will win.”