According to a recent report by Bloomberg, Argentina, grappling with staggering inflation rates, is witnessing a growing inclination towards Bitcoin as a hedge against economic instability. Citing data compiled by local cryptocurrency exchange Lemon Cash, the report underscores a notable surge in Bitcoin transactions, nearing their highest weekly value in 20 months.
The surge in Bitcoin transactions appears to align with President Javier Milei’s implementation of shock therapy policies aimed at revitalizing the economy, prompting Argentines to explore alternative avenues for financial security amidst the economic uncertainty.
With Argentina’s annual inflation rate soaring to 276%, the citizens are increasingly turning to Bitcoin as a means to preserve their wealth against the erosive effects of inflation.
Lemon Cash’s data indicates nearly 35,000 Bitcoin purchases in the week ending March 10, marking a doubling of the weekly average compared to the previous year. Similar trends are observed across other exchanges in Argentina. Chainalysis, a blockchain analytics firm, previously highlighted in a research report that Argentina leads Latin America in raw crypto transaction volume, with an estimated $85.4 billion in value received, showcasing a significant grassroots adoption of cryptocurrencies in the region.
As Bitcoin gains traction as an alternative investment, Argentines are diversifying their portfolios to shield themselves against the ravages of inflation.
However, the burgeoning interest in cryptocurrencies has also led to a surge in scam activity. Bitcoin Argentina, a local non-governmental crypto organization, reports a fivefold increase in crypto-related scams in February this year. Gabriela Battiato, the organization’s head of legal, has issued warnings about the risks associated with impulsive investment decisions in the volatile crypto market.
