Cryptocurrencies have now reached Argentina, with the amount of cryptocurrency trading accounts that are active in the country increased ten times since 2020. This information came at the behest of Binance’s head, Maximiliano Hinz, from the region of Latin America.
One of the biggest reasons why crypto has become increasingly popular in Argentina is due to the sheer popularity of BTC as well as certain other altcoins in the country. This was also the result of the ever-increasing inflation, and so the decision to start investing in cryptocurrencies is said to be a way to hopefully balance it out.
Looking to get rid of inflation
The peso, Argentina’s main currency, has been experiencing gradual inflation every day for over three years now. During this time, inflation had managed to average 45% in the country, and the GDP (Gross Domestic Product) had also decreased by approximately 10% last year. Lastly, the Argentinian economy’s been in a continuous recession ever since the year 2018.
Previously, the country’s citizens had attempted to reduce inflation by investing in the U.S dollar, but this has not exactly worked out for them in the long run. Moreover, the fact that the local government had also implemented very strict limitations in terms of purchasing for the local residents ($200/month) certainly did not help matters either. So, all of this does point in the direction of cryptocurrencies for the Argentinians, and many look to the volatile industry to solve their financial problems. With this in mind, Hinz had stated that nearly 2 million accounts for the purposes of trading have now been registered in Argentina.
Marcos Zocaro, a specialist in the world of digital assets, had claimed that the fact that both Venezuela and Argentina are experiencing high inflation is no coincidence, as these are the primary cryptocurrency attractors within all of South America.
Of course, it goes without saying that while cryptocurrencies certainly have their benefits, they are not without risks. Nowadays, there is much uncertainty in the world thanks to the global pandemic and many losing their jobs, and so a large number of people all over the world are turning to cryptocurrencies. Argentina is no exception to this, but the problem is that many Argentinians are entering this industry with little to no knowledge or previous expertise regarding it, according to Moneda PAR’s founder, Sebastian Valdecantos.
Argentinians are already striving to pay for nearly every social utility through the use of digital assets anyway, so it would make sense for them to invest in crypto as well, but time will only tell whether this will benefit or harm them in the long term.