- Bitcoin purchases on Lemon, a popular local cryptocurrency exchange in Argentina, have reached their highest weekly values, representing the highest level in 20 months.
- Lemon reports a significant increase in customer transactions, with nearly 35,000 Bitcoin purchases recorded in the week ending March 10, doubling the weekly average from the same period last year.
- According to Manuel Beaudroit, CEO of the digital wallet Belo, the volume of Bitcoin and Ether transactions in 2024 has increased tenfold compared to the same period last year.
In response to Argentina’s high inflation rate of 276%, citizens are turning to Bitcoin to protect their wealth.
Argentinian Citizens Turn to Bitcoin
In response to Argentina’s high inflation rate of 276%, individuals are increasingly turning to Bitcoin as a way to protect their wealth instead of the traditional approach of exchanging pesos for dollars. This shift in strategy disrupts a long-standing practice that historically made Argentina a leading target for dollarization amid economic instability.
Bitcoin purchases on Lemon, a popular local cryptocurrency exchange in Argentina, have reached their highest weekly values, representing the highest level in 20 months. This increase reflects a growing trend among Argentinians seeking financial stability amidst economic stagnation and one of the world’s highest inflation rates.
Traditionally, exchanging pesos for dollars has been a common strategy to hedge against economic fluctuations, but this approach has lost popularity in recent months. This decline coincides with a 10% strengthening of the dollar against the widely used parallel exchange rate during the same period. In contrast, Bitcoin has shown an almost 60% increase against the greenback during the same period.
Lemon reports a significant increase in customer transactions, with nearly 35,000 Bitcoin purchases recorded in the week ending March 10, doubling the weekly average from the same period last year. Similar trends were observed among customers of other major exchanges in Argentina, including Ripio and Belo.
A key factor contributing to the recent strength of the peso is Milei’s tight control, preventing the expansion of the money supply while replenishing the Central Bank’s reserves.
Converting USD to BTC
According to Manuel Beaudroit, CEO of the digital wallet Belo, the volume of Bitcoin and Ether transactions in 2024 has increased tenfold compared to the same period last year. Beaudroit noted that due to the ongoing Bitcoin rally attracting more investors, the purchase rate of stable cryptocurrencies, typically tied to currencies like the US dollar, has decreased from 70% to 60%.
Beaudroit explained, “Users prefer to buy Bitcoin when its value rises, whereas stable cryptocurrencies are generally used for practical transactions and international payments.” With the ongoing Bitcoin rally, Argentinians are now diversifying their savings, exploring investment opportunities to hedge against inflation after relying on dollar savings for years.
The government has also supported crypto investments. In December 2023, the Argentine government announced tax incentives for declaring crypto assets.
