Bitcoin is up 83% year to date against the peso as the currency devalues on a weekly basis.
Argentina’s annual inflation rate surpassed 100% in February, marking a 30-year high since the nation’s hyperinflationary period in 1991.
Meanwhile, Bitcoin has appreciated against the Argentine Peso by 20% over the past year, despite posting a 34% drop against US dollars over the same period.
- Government data released on Tuesday showed a Consumer Price Index (CPI) increase of 6.6% across the month alone, alongside a 13.1% year-to-date rise.
- The rapid debasement of the nation’s currency can be felt in real-time by its citizens. Irene Devita, 74, told the Guardian that her community is struggling to afford anything as they endure surging costs that rise weekly.
“The other day I came and asked for three tangerines, two oranges, two bananas, and half a kilo of tomatoes. When he told me it cost 650 pesos [$3.22], I told him take everything out and leave just the tomatoes because I don’t have enough money,” Devita said.
- Argentina had one of the top ten highest inflation rates in the world in 2022 – and has nearly doubled from last March’s rate of 55.1%.
- The region also has a relatively high crypto adoption rate, ranking 13th in Chainalysis’s 2022 crypto adoption index, despite the nation’s central bank clamping down on crypto-related services.
- Nigeria and Turkey led Argentina in that same index – countries that also face troublesome inflation that only serves to boost crypto adoption. Due to its fixed supply, Bitcoin bulls often regard the asset as a long-term inflation hedge.
- On the contrary, central Banks overseeing relatively stable currencies, such as the Bank of Canada, argue Bitcoin is not an inflation hedge due to its relative volatility.
- Bitcoin reacts strongly to central bank policy, however: the asset is up 30% this week after the Federal Reserve injected $300 billion in loans to qualified banks.