As recently reported the increasing interest for Bitcoin in Argentina as it is proving to be the saviour for the falling economy. The data including the rise in purchasing volume is looking good on paper and if this interest continues to grow the growth in the price of the Bitcoin should not be surprising.
Due to the rising interest rates in the US and a severe drought that hit the nation this year the country’s economy has slumped. Increase in inflation and a decrease in the Peso, the local currency was the result. The drought has severely impacted agricultural yield, which contributes 10% to the GDP, to the tune of 40% losses in grain.
Also, as the US takes steps to strengthen its economy, including a hike in interest rates, money has started flowing back into the country impacting emerging markets like Argentina. The GDP has seen a steep drop by -4.5% in the current fiscal quarter.
Argentinians are having high hopes with Bitcoin and considering it as their saviour so they may prevent their hard-earned money from losing value. While the market worldwide is having different synopses since January, for Bitcoin, purchase volume in Argentina is rising exceptionally. Sales volumes have been rising week after week for the past several months. Bitcoin commands an almost 3% premium over prices in other countries.
The Argentinian Central Bank is also considering to broaden a portion of its currency reserves into Bitcoin, as by design the cryptocurrency is deflationary. This demand of the bitcoin enthusiasts and the central bank could bring back the golden days of the Bitcoin.
The country is currently having more than 8000 stores where customers can buy and sell not only Bitcoins but also goods and services with it. A similar interest can be seen in the neighbouring countries like Chile and Venezuela which are also showing a positive sign in the purchase volume recently. Argentina and such countries may turn out to be the reason for the change in the circumstance for the Bitcoin in the market.