Bitcoin has experienced a significant price increase in Argentina following the victory of Javier Milei, a Bitcoin supporter and presidential candidate, in the election primaries. While the price of Bitcoin and other cryptocurrencies has been struggling recently, Bitcoin has made considerable gains in Argentina. The price of Bitcoin surged by 21% to 10.2 million Argentine Pesos (ARS) from 8.4 million ARS in less than an hour on August 14. Although the price has since corrected to 9.9 million ARS, it still remains significantly higher than before. Bitcoin has consistently shown impressive growth against the Argentine Peso since late last year, with a 210% rise reported by CoinGecko data since August 2020.
The spike in Bitcoin’s price is attributed to the victory of Javier Milei, who is a strong supporter of Bitcoin. Milei has referred to Bitcoin as the people’s response to what he calls “central bank scammers.” He holds an anti-fiat currency stance, believing that fiat currency empowers politicians to exploit Argentines through inflation. This position has resonated with many Argentines, given the country’s high inflation rate of 116%, which some predict may rise to 142%. The central bank of Argentina has forecasted a rate of 148.9%.
Milei emerged victorious in the primaries held by his party, “La Libertad Avanza” (Freedom Advances). He secured a staggering 84% of the votes and scored 30.73% of the total votes. The “Unidos por la Patria” (United for the Homeland) coalition and the “Juntos por el Cambio” (Together for Change) party received 26.84% and 28.14% of the votes, respectively.
Bitcoin and Crypto in Argentina
Although Milei is pro-Bitcoin, he does not believe that Bitcoin should be made legal tender like in El Salvador. Instead, he advocates for dollarization of the economy, suggesting that Argentina should adopt the US dollar. This stance contradicts a plan by Argentina and Brazil to launch a common currency to strengthen their economic and trade relationship while reducing dependence on the US dollar.
In May, the central bank of Argentina banned payment providers from supporting cryptocurrency transactions, stating that financial institutions should not facilitate any transactions involving unregulated crypto assets. This move was met with criticism from the Argentine Chamber of Fintech, which argued that such regulations hinder progress and limit the choices available to Argentines seeking alternatives to protect their purchasing power in an inflationary environment.
The price of Bitcoin in Argentina has surged after pro-Bitcoin candidate Javier Milei won the election primaries. Bitcoin rose by 21% to 10.2 million ARS from 8.4 million ARS in less than an hour. Despite a subsequent correction to 9.9 million ARS, Bitcoin still remains significantly higher than before. Milei’s victory reflects the growing interest in Bitcoin as a means to counteract inflation in Argentina, which currently stands at 116%. However, Milei advocates for dollarization of the economy, contradicting Argentina’s plan to launch a common currency with Brazil. The central bank’s ban on crypto transactions has also been met with criticism.
What caused the price of Bitcoin to rise in Argentina?
The price of Bitcoin surged in Argentina following the victory of presidential candidate Javier Milei, who is a strong supporter of Bitcoin. Argentines view Bitcoin as a means to counteract the country’s high inflation rate.
Why does Javier Milei advocate for dollarization of the economy?
Milei believes that adopting the US dollar would help protect the purchasing power of Argentines and prevent politicians from taking advantage of inflation.
Has the central bank’s ban on crypto transactions been well-received?
The ban has been criticized by the Argentine Chamber of Fintech, which argues that it limits choices for individuals seeking alternatives to protect their purchasing power and hinders progress in the crypto sector.