- The current Bitcoin price is the highest since December 2017
- Fear amidst the falling Peso seems to be the driving force
- Argentinians are finding an alternative in cryptocurrencies
Bitcoin has surpassed the 2017 all-time high in at least one of the traditional fiat currencies-the Argentine Peso. The so-called notoriously volatile digital currency seems to have become a better store of value in the Latin America country.
According to a Reddit user, the bitcoin price was at 354,907.57 ($7,913.73) Argentine Pesos per BTC as at Sunday, June 9, 2019, but had soared to the higher level of 394,000 ($8,762.95) Argentine Pesos towards the end of May 2019. The current price has exceeded prices not seen ever since the late 2017 Bitcoin bubble.
This new all-time high of bitcoin vs. the peso is taking place amid a crypto bull market that has coincided with the ongoing depreciation of the Argentine Peso against the United States dollar. A Mexico City based-investor Josu San Martin tweeted earlier in May 2019 saying:
If an Argentinian had bought Bitcoin at the highest point of the "biggest bubble in history", in 2017, he would have been better off than leaving his money in his Argentinian bank account. So tell me again how Bitcoin is a horrible store of value. pic.twitter.com/55YuAi9vD4
— Josu San Martin (@josusanmartin) May 19, 2019
Fear among Argentinians
The value of bitcoin fell in Argentina for most of 2018 because of the long-drawn cryptocurrency winter that was experienced for most of that year. However, beginning in February 2019, the price started rising fast to reach the current level. Inflation in Argentina has been at 50 percent a year since February before rising to 55 percent in April as the country clearly faces a severe economic crisis with the economic contraction of 1.2 percent at the astonishing 50 percent in real terms.
The driving force behind the surge seems to be the fear among Argentinians that the Peso is once again going south even after the IMF allowed the use of its funds for the Argentine Central Bank as a form of intervention in the currency if approaching elections to cause local and foreign investors into dumping peso assets out of fear. The peso plunged to new lows last April against the US Dollar after it lost over half of its value last year.
Alternatives in Cryptocurrencies
Argentina has centralized cryptocurrency exchanges and brokers but the country’s wildly galloping inflation is potentially leading many Argentinians to look for alternatives in cryptocurrencies in general but in bitcoin in particular. Earlier in March 2019, venture capital billionaire and Bitcoin advocate Tim Draper advised the Argentinian president to consider legalizing bitcoin in order to improve the country’s economic situation.