BTC could save Argentina from economic turmoil, maximalists believe

21 May, 2019 | Updated: 21 May, 2019
by Fifi Arisandi
BTC could save Argentina from economic turmoil, maximalists believe

Bitcoin has become a safe haven for Argentinian investors as the country fights against economic and political turmoil.

Argentina’s economic turmoil doesn’t seem to calm down anytime soon. President Mauricio Macri’s efforts to fight against the stubborn inflation hasn’t seen any success stories so far. In fact, he’s become increasingly unpopular, which undoubtedly will not benefit his plan of running for re-election.

On the other hand, former president, Cristina Fernandez de Kirchner, just announced that she will be running for vice presidency alongside Alberto Fernandez in the upcoming presidential election in October 2019.

The announcement has brought fear to Argentinian investors as it might bring populism back to the country if she manages to reign again.

“Cristina Fernandez is considered by investors to be a riskier prospect because of her past populist policies. She introduced currency controls and tax increases on farm exports while in office between 2007 and 2015,” Reuters wrote.

As a result, investors are now turning to US dollars and Bitcoin as an alternative to the national currency, as reported by Bitcoinist.

With a 55% inflation rate, or over 80% when measured using high-frequency data according to economist, Steve Hanke, Bitcoin is seen as a “savior” to the economy as Peso’s value plummets.

Many arguments have emerged on how Bitcoin is a better store-of-value than Peso, one of them, came from Josu San Martin, Partner at Sixtant, who said, “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.”

Despite its high volatility, in the long run, Bitcoin is believed to be a better option than gold, especially as digital economy has become increasingly popular these days.

President Macri is said to have received various advice about how Bitcoin could save Argentina’s economy. Billionaire Tim Draper was one of them who said it directly to the President when he paid the country a visit a couple of months ago.

“I suggested that he [President Macri] make Bitcoin a national currency and to bring in 5G and let the market figure it out and build all the roads and everything else for him,” said Draper at the time.

Will we ever see Bitcoin saving Argentina from the economic turmoil in our lifetime? Stick with Chepicap to find out.

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