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Bitcoin demand in Argentina reaches its highest point in almost two years

by SuperiorInvest

Efforts by Argentinians to preserve their savings amid the continued decline of their national currency, the Argentine peso (ARS), have resulted in the nation recently reaching its highest demand for Bitcoin (BTC) in 20 months, according to a report recent.

On March 20, Bloomberg reported data from cryptocurrency exchange Lemon Cash revealing that nearly 35,000 customers in Argentina purchased Bitcoin in the week ending March 10, which is double the weekly average compared to 2023.

Bitcoin purchases in Argentina Jan 2023 – March 2024. Source: Bloomberg

An important factor for the increase in demand is the current decline in the country's currency.

In the last twelve months, the value of the ARS against the US dollar has quadrupled, going from $0.0049 per ARS in March 2023 to $0.0012 at the time of this publication.

However, it was noted that Lemon was not the only platform to see an increase in demand. Other major exchanges in Argentina, such as Ripio and Belo, reported similar trends.

According to Belo digital wallet CEO Manuel Beaudroi, stablecoin purchases in Argentina decreased from 70% to 60% as the recent rise in Bitcoin price attracted more interest.

“The user decides to buy Bitcoin when they see the news that the currency is going up, while the stablecoin is more pragmatic and is often used for transactional purposes, as a vehicle to make payments abroad.”

He also stated that Belo has seen Bitcoin and Ether volume increase “ten times so far in 2024 compared to the same period last year.”

However, a recent report suggests that there could still be interest in stablecoins, with Argentinians possibly opting not to use well-known exchanges within the country to purchase them.

On February 12, Cointelegraph reported that Argentinians are using black market exchanges, known locally as “crypto caves,” to purchase dollar stablecoins in an effort to escape strict currency controls and rising ARS inflation.

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Meanwhile, the use of digital currency for specific transactions is slowly gaining ground within the country.

In December 2023, Diana Mondino, Minister of Foreign Affairs, International Trade and Worship, stated that a decree aimed at economic reform and deregulation would allow the use of Bitcoin and other cryptocurrencies in the country under certain conditions.

Following the ruling, a local landlord and a tenant in Rosario, Argentina's third most populous city, sealed a rental contract in which the latter would pay the monthly rent in Bitcoin.

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