Bitcoin trading had more than doubled in the last one week. The upwelling in BTC trading happens during what is perhaps the country’s worst economic downturn in the recent past.
According to an announcement by LocalBitcoins peer-to-peer exchange via twitter, the record is highest in the country. The trading explosion began last week when Argentines turned to bitcoin as an alternative to a local currency that lost over 50% of its value in a week.
Not Subject to Whims
The move led to a record-setting volume of 101 million Argentina peso or $1.4 million. This was 30 million higher than the previous all-time high weekly volume for bitcoin, which stood at 69 million. Argentina is facing the worst economic crisis in the wake of an acrimonious stand-off regarding roughly $65 billion in international bonds. In terms of US dollars, according to Useful Tulips, the Argentine volumes shot from $500,000 the previous week to the current $808,000.
Bitcoin is finally becoming a more appealing alternative to fiat currencies, especially in countries with troubled economies. Investors prefer it because it cannot be directly affected by political forces that underlie market turbulence. Because of its decentralized nature, bitcoin cannot be dictated by a single government. Similarly, the king of cryptocurrency is not subject to the whims of political leaders or central banks.
Seeking Refuge in Cryptocurrency
The insulated nature of bitcoin has helped it remain stable amid the economic turmoil caused globally by Covid-19 lockdowns. Put simply, people are seeking refuge in cryptocurrency because they can’t find anywhere else to hide. The CEO of Ampleforth, a digital asset protocol, Evan Kuo, said recently:
“In a slowdown, since the global economy is so interconnected, there are only a limited number of assets that are isolated […] there have been almost ten years of data to suggest that the coin has almost no risk exposure to precious metals, commodities, equities, currencies, and so on.”
Bitcoin as a Safe Haven
To this end, bitcoin is not subject to the same forces as fiat currency. This is the reason people who feel less trust for fiat currency choose it as an alternative. In Venezuela, Lebanon, and now Argentina, political tensions have led to inflation. On the other side, Covid-19 influenced economic conditions, and the desire for a non-contact payment system has had traders choose bitcoin as a haven. There is an opportunity in a crisis, so the saying goes—and it appears that this might be the case for Bitcoin in Argentina.