Argentinian Economy Nosedive Attracts Crypto Investors as Peso Falls

[Kemarit]

Argentinian Economy Nosedive Attracts Crypto Investors as Peso Falls

Argentina is not quite undergoing the pain of Venezuela but it’s beginning to feel the economic pressure, driving numerous investors to Bitcoin as a safe haven for their pesos.

The Argentinian economy has shrunk by 4% during the second quarter, with President Mauricio Macri’s government announcing that it expects the economy to shrink further by 2.4% this year. One of the causes of the slump has been attributed to a drought that occurred early in 2018 which severely damaged soybean and corn production.

https://bitcoinnews.com/argentinian-economy-nosedive-attracts-crypto-investors-as-peso-falls/

It looks like another country on the brink of financial collapse made people to move their money to bitcoin as a leverage to their problems. It really looks though that bitcoin or crypto is challenging the traditional hedge (gold or other precious metals). Perhaps one advantage of crypto is that it's easy to spend as compare to gold that's why people really find it easy to shift their cash to fight inflation and survived. This could be a good test case again, as we have seen Venezuela and Zimbabwe staying afloat because of bitcoin/cryptos.

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[1Referee]

It's almost like we're talking to a wall. What input can you expect from talking to a wall? Null. The same input do I get from average joes when I explain them that it's very important to hedge a part of their their net worth, but for whatever reason, they refrain from doing so. I seriously don't know what needs to happen before they realize that. Is it a total collapse of their economy? If that is the case, it will be too late for them to act because the damage has already been inflicted.

I'm glad that at least the economical layer in South America does know how important it is to hedge their native fiat currency. For those who have been in any country within South America, you'll know that businesses and stalls there will almost beg you to pay for goods in US dollars instead of their own currency. It has been like that for over a decade. Why can't the average joes not follow that example?

This could be a good test case again, as we have seen Venezuela and Zimbabwe staying afloat because of bitcoin/cryptos.

I actually doubt that. Have we really seen much crypto use in these countries other than what has been hyped up by shitty news outlets? I mean is there actual proof that we can look into that shows people in Venezuela and Zimbabwe have actually resorted to crypto?

[exstasie]

I'm naturally skeptical of these kinds of narratives. (Remember the Cyprus narrative in 2013?)

But maybe there's something to this. I looked into it a bit and it seems like Argentinian trading volumes are rising significantly. That wouldn't mean much if it were the global trend, but we can see that over the same period, volumes have been dropping everywhere else (typical lull after a bubble). Argentinians also appear to be paying premiums to acquire BTC, around 3% right now.

Take everything with a grain of salt and all, but I'm not writing this off yet.

[taratorly]

Very high inflation puts countries like Argentina in difficulty. Some people turn to crypto-money to reduce the loss of value.

[BitHodler]

Argentinians also appear to be paying premiums to acquire BTC, around 3% right now.

I don't really consider this to be a premium that's noteworthy. Other countries with backwards economies have in some cases traded premiums of over 20% which to me reeks of more economical desperation.

That of course doesn't mean the premiums in Argentina won't be growing significantly higher in the coming year or so. It requires some time to actually see what the real effect is on the price of Bitcoin over there.

The only thing that fascinates me is that while premiums in backwards economies grow higher, the actual network use as in number of transactions doesn't really grow with it. Maybe an indication of pure speculation rather than use?

[oriontab]

You wake up one morning to discover that the money younkept in the bank are turning worthless, nice piece of colored paper with some government unknown it, I never consider money saved in the bank as much of an asset. The smart investors know this, that why many prefer their wealth assets such as gold, real estates, precious metals and more recently bitcoins.the latter have the added advantage of being easiest to convert back to fiats if the need be.Cryptos certainly will play better role as a store of wealth troubled economies such that Argentina

[stompix]

This could be a good test case again, as we have seen Venezuela and Zimbabwe staying afloat because of bitcoin/cryptos.

Please tell me you don't actually believe this!

Reminds me how everyone is saying China has the most BTC, the most miners, the most trading, and yet when that girl tried to live on BTC and ended up scavaging leftovers as nobody accepted her coins.
 

I'm naturally skeptical of these kinds of narratives. (Remember the Cyprus narrative in 2013?)

But maybe there's something to this. I looked into it a bit and it seems like Argentinian trading volumes are rising significantly. That wouldn't mean much if it were the global trend, but we can see that over the same period, volumes have been dropping everywhere else (typical lull after a bubble). Argentinians also appear to be paying premiums to acquire BTC, around 3% right now.

Take everything with a grain of salt and all, but I'm not writing this off yet.

Yeah, that one was pretty funny. All the banks were locked up and people were buying  BTC ..how and with what nobody knew.

But about that trading volume  (the article you mentioned shows no volume at all) and I haven't heard yet of an Argentinian exchange so...what numbers are we talking here?

[tomahawk9]

This could be a good test case again, as we have seen Venezuela and Zimbabwe staying afloat because of bitcoin/cryptos.

That's not exactly true. The economic situation in Venezuela just keeps getting worse everyday, they're getting to the 3-figure numbers in terms of monthly inflation, with more than 15% increasing inflation every week (that's around 2% every day). All those things people say about people in that country adopting cryptocurrencies in order to survive are nothing but lies, merchants don't even accept cryptos (last I heard, you can find some people accepting Dash and BTC for they're so few that it's almost insignficant), so there's really nothing you can do with your cryptos other than to sell it for fiat currency.