Bitcoin exceeds 1 million pesos in Argentina, which was the highest historic price in Argentine pesos by BTC. Why is that? Inflation, the rise in the dollar price, the corona virus? What if we told you that they are all at the same time?
Yes, as you read, Bitcoin is hovering far from its own $ 20,000 all-time high of $ 8,700 today, surpassing the all-time high in pesos every day. A real debacle of the Argentine fiat currency.
This shows the delicate situation in which the Argentines are. Immersed in inflation, in a devastating polarization, with the continent’s second worst currency in their bank accounts, devaluing against the dollar every day. And many other problems that we cannot list here.
Bitcoin exceeds 1 million pesos
Today Bitcoin is in the main crypto exchanges in the Republic of Argentina over a million pesos. Is in 1,060,189.23 Pesos in Ripio and 1,054,455.05 at SatoshiTango.
While each BTC was around 300,000 pesos or $ 20,000 in December 2017, this was the historic maximum of the world’s first cryptocurrency.
This corresponds to a loss of more than 250% of the purchasing power of the Argentine peso against the US dollar, at least measured against Bitcoin.
In short, the Argentine peso has lost almost four times its ability to buy BTC today.
Here we will try to find some culprits, such as inflation and the devaluation of the Argentine peso.
Inflation was one of the main historical enemies of Argentine savings. Throughout their history, they have had major political and social problems that have led to dictatorships, famines, and consequently large inflation processes. That they have destroyed Argentina’s purchasing power for decades.
Although today Tango country inflation is only 3.3% per month, which is not as high as in the past, which is more than 50% per year. For the rest of the world, this number is a little worrying.
Most of the world has long since overcome these problems. Now it is normal for annual inflation to be around 1. Inflation of 50% is therefore quite alarming for international investors.
This monetary phenomenon is so destructive that it will surely be difficult for you to remember what you could buy with 1,000 pesos in 2017.
But we have the perfect example: with 300,000 pesos in 2017, I would have bought 1 BTC or $ 20,000. If we assume that BTC was $ 20,000 today, which equates to 2,437,000 Argentine pesos at a Bitcoin price of 121 pesos, you would only buy 0.12 BTC today with 300,000 pesos.
The price of the dollar
The other big enemy of Argentine savings is the price of the dollar. The dollar-peso exchange rate in Argentina is currently continuing its upward trend, much faster than wages for residents.
This is due to the unfavorable conditions of trust that the Argentine governments have created in their history. Not only the trust of foreign capital investors, but also the fellow citizens.
In Argentina’s recent history, there have been several defaults on foreign debt obligations. What has caused a deep brand to be eliminated are constant high interest rates for any type of loan or investment in the Argentine area.
This is usually broadcast directly in the Argentine territory with exchange rate increases. But distrust of the public quickly makes them drop their pesos and convert them into dollars or euros.
This includes a possible increase in the dollar or control of capital outflow and the procurement of international currencies. What creates the lack of dollars or euros? And that’s why the price of these currencies, which are still a good one, is accelerating even more.
Today, the retail dollar is around 70 pesos, the blue dollar or parallel dollar is 118 pesos, and the Bitcoin dollar is 121 pesos.
This is another factor that undermines Argentinean savings and another factor that brings Bitcoin to over 1 million pesos.
Together against Argentina and Bitcoin
These two factors, inflation and the price of the dollar, both of which are rising steadily, cause the price of bitcoin in pesos to continue to exceed historical highs.
Inflation meanwhile means that the Argentine peso is worth less. While the constant depreciation of this currency symbol means that more and more pesos, which are less and less worth, are needed to buy the valuable dollars that will enable him to face the crisis.
Both form a vicious circle that is directed against all Argentines, regardless of the social class or the subsequent political party.
Meanwhile, Bitcoin (BTC) is gaining strength among Argentines. However, it is expensive to obtain by conventional means.
Can Argentina survive this crisis? Without a doubt it has been done before. But this time they have BTC at their side.