Downfall of Argentine economy fuels crypto craze

The Latin American country has around two million accounts for crypto trading

Aires, May 4: Argentina’s economic downturn, with high inflation, a deflating currency and a shortage of US dollars to invest in, has in fact proved a shot in the arm for one sector: cryptocurrency.

As they seek safe havens for their dwindling nest eggs, Argentines — used to buffering against economic crises — have been putting their money into Bitcoin, Tether, Etherium or Dai.

“The number of user accounts for investing in ‘cryptos’ has multiplied by ten in Argentina since 2020,” said Maximiliano Hinz, Latin American director of cryptocurrency exchange Binance, the world’s largest by trade volume. There are now an estimated two million crypto trading accounts in the country of 45 million people.

Argentina has been in recession since 2018, with inflation averaging 45 percent over the last three years, and a GDP contraction of 9.9 percent in 2020.

Poverty haunts two in five people, and unemployment is at 11 per cent.

For those wishing to put money aside for a rainy day, cryptocurrencies offer relief from low interest rates and a government-imposed limit on greenback purchases of $200 per month in a population accustomed to dollarising savings.

One Bitcoin is now worth about $60,000, or 5.6 million pesos.

“It is no coincidence that Argentina and Venezuela, countries with high inflation, are the main crypto poles in South America,” said Marcos Zocaro, a specialist in digital assets.

Where previously cryptocurrency may have been the reserve of tech wizards, trading platforms “have evolved to create bridges to a public without financial education,” said Sebastian Valdecantos, an economist and founder of Moneda PAR, an online Argentine credit system.

On some platforms it requires just two clicks to make a purchase or sale.

Also no longer limited to the rich, Argentines from all backgrounds and age groups are getting on board, with investments possible from a single peso.

“I have older clients who used to be afraid of making a fixed deposit with a bank but are buying cryptocurrency without fear of risk,” said Zocaro.

In Argentina, it is becoming increasingly common to buy and sell everything on sites operating in virtual currency.

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● FOR THOSE wishing to put money aside for a rainy day, cryptocurrencies offer relief from low interest rates and a government-imposed limit on greenback purchases of

$200 per month.