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Argentinians are buying Bitcoin instead of US dollars to protect themselves from currency devaluation
Inflation in Argentina prompts citizens to buy Bitcoin instead of the US dollar, with Lemon crypto exchange experiencing a significant increase in BTC purchases. Other major exchanges in the country also report a similar trend. The appeal of the US dollar as a safe-haven asset has decreased as Bitcoin's value rises, causing locals to use their dollar savings for investments to protect against inflation. Don't miss out on the latest news - subscribe now! Follow us on Twitter, Facebook, and Telegram for more updates.
Argentinians are buying Bitcoin instead of US dollars to protect themselves from currency devaluation
Argentinians are buying Bitcoins to protect themselves from the valuation of their currency, according to a press release. The country has an inflation rate of 276%, one of the highest in the world. Crypto exchange Lemon recorded 35,000 transactions to purchase Bitcoin in the week ending March 10, double its average over the last year. Other major exchanges in Argentina such as Ripio and Belo are also recording a similar trend. Bitcoin buying volumes have increased tenfold compared to last year, while stablecoin purchases have fallen to 60%. The US dollar has lost its safe-haven appeal over the past two months as Bitcoin's value has increased by 60% against the dollar, while the Argentine peso has only gained 10% against the dollar over the same period. Argentinians have saved an estimated $200 billion in their currency and are now using their dollar savings to invest to protect themselves from inflation.
Table: Bitcoin Purchase Volume in Argentina (Based on Lemon Data)
| period | Purchase volume |
|---|---|
| 2019 | 17,500 |
| 2020 | 20,000 |
| 2021 | 25,000 |
| January 2022 | 17,500 |
| February 2022 | 18,000 |
| March 2022 (until 10) | 35,000 |
The table shows the purchase volume of Bitcoin in Argentina based on data from the Lemon crypto exchange. Purchase volumes have increased sharply in 2022, indicating the threat of inflation in Argentina.
The high inflation rate of 276% in Argentina has led people to look for alternatives to store their wealth. Traditionally, the US dollar has been the preferred currency for savings, but due to the rise of Bitcoin in recent months, more and more Argentinians are choosing to buy Bitcoin to protect their wealth. Bitcoin offers the advantage of not being controlled by governments or banks and having a limited total supply. This makes it an attractive option for people in high inflation countries like Argentina.
The rising demand for Bitcoin in Argentina also reflects the general trend of people around the world looking to cryptocurrencies to hedge against currency devaluations and economic uncertainty. However, Argentina is a particularly interesting case because it has one of the highest inflation rates in the world and people there are severely affected by the effects of currency devaluation.
It is important to note that buying Bitcoin also comes with risks. The crypto market is volatile and Bitcoin prices can fluctuate wildly. There may also be technical problems or security vulnerabilities with crypto exchanges. Nevertheless, the increasing demand for Bitcoin in Argentina is an indicator of the growing acceptance of cryptocurrencies as an asset protection tool in economically uncertain times.