Argentines are turning to Bitcoin to protect themselves from 276% inflation instead of rushing to exchange pesos for dollars, challenging a long-standing strategy that has made the crisis-prone country one of the top places for greenbacks in the world.
Bitcoin purchases in Argentina — one of the nations with the highest level of cryptocurrency adoption globally — have reached their highest weekly value in 20 months at Lemon, a popular local cryptocurrency exchange among retail customers.
Amid a recession and one of the world’s highest inflation rates, Argentines are seeking ways to survive as President Javier Milei implements his shock therapy policies aimed at resetting the economy. Exchanging pesos for dollars, the traditional safe haven for decades, has lost some appeal in the past two months. The commonly-used parallel exchange rate has strengthened 10% against the dollar, while Bitcoin has surged almost 60% against the greenback over the same period.
In the week ending March 10, Lemon recorded nearly 35,000 customer transactions to buy Bitcoin, doubling the weekly average from last year. This trend was also observed among customers of other major exchanges in Argentina, such as Ripio and Belo.
A significant factor behind the stronger peso in recent weeks is Milei’s strict control over the money supply, preventing its growth while the central bank rebuilds its stockpile of cash dollars.
At digital wallet Belo, the volume of Bitcoin and Ether transactions has increased tenfold so far in 2024 compared to the same period last year, according to CEO Manuel Beaudroit. He noted that purchases of stablecoins — crypto assets often tied to currencies like the US dollar — have fallen to 60% from 70% over that period, as Bitcoin’s rally attracted more buyers.
“When users see news about Bitcoin's rising value, they decide to buy it, whereas stablecoins are more pragmatic and often used for transactional purposes, such as making payments abroad,” Beaudroit explained.
