Bitcoin becoming a safehaven currency in Argentina

[Yaunfitda]

It's happening, and some people predicted that Bitcoin will be a safe haven for many people who are sick from the banking sector. One by one country will start turning to cryptocurrencies, and people will turn to the safest and the best one, Bitcoin.

And that is why some government around the world are trying to protect themselves by either banning or putting a regulatory framework because they don't want this to get out of hand.

Let's wait for some time and see which country will be the next one. Can anyone predict from which country we will receive news about adoption in the next few months?

We can't really say who's country is next.

And after Argentinian puts a restriction on bitcoin, Bitcoin Trading Volume Hits New ATH in Argentina After Central Bank Banned Purchasing Crypto with Credit Cards. This is going to be ugly, they might turn out to be the next Venezuela here, where people are using bitcoin in order to survived because their government is failing them.

[TheUltraElite]

That doe snot mean that there are not other services that offer that option. This is normal for economies where they restrict buying other countries currency while their is depreciating, very irresponsible move from bank.

Banks have their own reason to put up such restrictions. You should blame this on whales who have tried to put through some good amount of coins through their exchanges and came under investigation from authorities or the surveillance groups finding out some black market deals going through. Nobody can say for sure and nobody will.

Its sad for the people living there but truth is even though they cry foul, nobody is going to care.

[abhiseshakana]

The Argentinian Central Bank is now putting restrictions on the purchase of bitcoin:

https://u.today/bitcoin-trading-volume-hits-new-ath-in-argentina-after-central-bank-banned-purchasing-crypto-with

In order to preserve its foreign exchange reserves, the Central Bank of Argentina (BCA) barred its citizens from buying cryptocurrencies with credit or debit cards on Oct. 31. From now on, cryptocurrency investors are only able to transfer funds from their bank accounts.

To give you an idea of how worthless the Argentinian Peso is, Google says 1 Argentinian Peso = 0.0000018 bitcoin.

Thats right: 1 Argentinian Peso = 180 satoshi.

In my opinion, the prohibition of purchasing cryptocurrency using a credit card is temporary. The government and the central bank take the policy with the aim of:
- Instability of the cryptocurrency market causes the highest risk when allowing the use of credit cards to purchase cryptocurrency. Concern about bad credit. So the bank assumes it's easier for customers to buy cryptocurrency than it is to pay credit card bills.
- The crypto market volatility is very high, banks are afraid that if there is a price decline like last year the debtor's ability to pay their bills also decreases.

While in Argentina itself, the ban on buying bitcoin with a credit card is intended to maintain the country's foreign exchange reserves. Because the purchase of bitcoin with a credit card causes a negative balance in the international trade balance because foreign exchange flows out.

Foreign exchange reserves can be used to maintain the external balance of the value of the peso or in other words to maintain the balance of the exchange rate of the peso against foreign currencies. When a peso depreciates, its foreign exchange reserves can be used to intervene by pouring foreign exchange on the money market so that the peso is appreciated

The government is concerned about the flow of hot money to Argentina. This will be safe when the foreign exchange reserves also increase, this indicates that the inflow of funds held by the monetary authority. The thing to worry about is when a lot of capital comes in but the position of foreign exchange reserves does not increase significantly. If this happens then when capital is run out (reversal of capital) then the peso goes down (depreciation) but due to low foreign exchange reserves, the Central Bank is not able to secure it by intervening so that the peso value can be held back or even rise (appreciation) again.

[seagates]

When people stop trust in fiat bitcoin comes

[LUCKMCFLY]

What the country fears most is the flight of capital through dollars and / or Bitcoin, it is obvious that people are now beginning to acquire dollars and / or Bitcoin anyway, this to protect themselves from the high rates caused by the inflation.

The regulatory measures for the country when it comes to limiting the flow of dollars is because in reality the government needs to have liquidity, that liquidity is achieved by devaluing currency to obtain currencies but the consequence is that its local economy suffers.

Based on other scenarios such as inflation in Venezuela, inflation has incalculable levels, but the exchange control obeys as a measure implemented by the government for the benefit of the government and not as an economic measure, since traditional economic measures do not solve the country, Argentina see this scenario and do not want to fall into the same situation, it is expected that by December the new president will assume possession, will follow the economic measures given by the current president.

Bitcoin is a refuge from inflation, in fact, it is the best fighter against inflation, when Bitcoin falls in price, it is still a great option against a traditional economy with rising inflation rates.

The positive of this, is that due to the crises in these countries, the demand for bitcoin increases, therefore the adoption is greater and in a short time, the higher demand less is the supply and therefore the price of Bitcoin increases .

[Vishnu.Reang]

I don't know what is wrong with these Latin American countries. They elect socialists to power and they indulge in all sort of freebie distribution and destroy the economy. Look at the case in Venezuela. Most of the issues can be resolved, if the subsidy on gasoline is removed and the prices are brought closer to the international rates. But the government doesn't want to do that.

[Kprawn]

Old news with new numbers, before the limit was $10 000, now it is only $100 in cash + $200 with a bank account. But I have no doubt that the people of Argentina will be able to circumvent all possible restrictions if there is a desire for something, there is also a way to make it happen.

The average salary in Argentina is around 19,014 ARS ($320), so I doubt too many people can invest in buying BTC or $ after paying all the living expenses in one month. Argentina is still quite a small market for crypto-based on OP article - in 4 days of trading only $200 000 is traded so far.

Previous discussion can be found in this thread: Argentina capital controls, a strong case for bitcoin

I doubt that the official trading volume are a true reflection of what is actually happening there. The black market traders know that the

government are putting restrictions on money flowing to other currencies, so they will avoid regulated exchanges. Previously Localbitcoins was a

more true source for what actually happens, but they too turn legal now, so you cannot use their data anymore.    It will be interesting to see

what the true data are for Argentina. 

[Ericgreen]

I am from Argentina and still in most remote places here not getting internet connections even in wireless mode too. Bitcoin may be a safe heaven for some part of people here but it may take decades before considering so in general for all Argentinians.

[davinchi]

Someone was asking whether they will continue to be holding Bitcoin even when the price is falling down, and yes of course there are people that would continue to hold even when the price of Bitcoin is going down. Some people are getting discouraged because of this price that has decreased recently.

I am not even worried about that, I'm still holding my coins and not minding the price that keeps fluctuating up and down. If you're afraid you can go for asset backed cryptocurrencies. And from what I've been reading lately online, there might soon be a bull run, some people will not believe it because they are afraid, until when it's late that is when they start buying out of FOMO.

[Gyfts]

This is the case for Venezuela too. When President Nicolás Maduro threw the economy into the ground with extreme socialist intervention, this drove their economy to the dirt when oil prices fell. Even with oil prices low, they could have made it out had Maduro not taken over all major businesses of the country since 2013. You see Venezuelans adopt Bitcoin when their currency crashes and it's the same story with a lot of South American countries including Argentina. When centralization takes over, people are going to dump their cash into decentralization.

[GideonGono]

Not that surprised though. As mention in the OP, Argentina is facing economic crisis which is the main reason why Bitcoin's price shoot up. By this news, we can see how Bitcoin can greatly help a country or a person to secure their assets in times of economic crisis wherein it is much easier and convenient to store it in Bitcoin or in cryptocurrency in general along with the security that you can have and maximizing it by purchasing cold wallets if you do not trust third party services to do it for you.

[redsun114]

That's a good idea if they have plans to hold it for a long time. And they should also b aware of the risks that are in holding cryptocurrencies because the price can fall at any time. It has been going now, but we don't know what it would be tomorrow. It's just like those that lost their money after the last bull run happened: there were people who invested a huge amount of money at the $19000 rate and when the price started to fall they lost more than half of their investment.

There are even some that couldn't bear the loss and they decided to give up and withdraw even at a loss. So anyone that is investing should have it in mind that there are risks involved and they should be ready for it.

[elewton]

https://www.newsbtc.com/2019/10/30/bitcoin-trades-at-large-premium-in-argentina-as-dollar-purchase-restrictions-set-in/

Bitcoin is trading at a large premium on cryptocurrency exchanges in Argentina. Demand remains high after the nation’s central bank announced a further tightening of a limit on the number of dollars an individual can purchase from it each month.

The policy essentially forces the people of Argentina to either sink of swim in an economy with a less than perfect track record. Well, it would, were it not for Bitcoin.

According to data taken from local cryptocurrency exchange Ripio, Bitcoin is trading at a large premium in Argentina. Whereas Coinmarketcap has the price of the leading digital asset at around $9,150 at the time of writing, Bitcoin is currently selling at the South American trading venue for ARS$633,862 ($10,578).

The nation has been in the grips of successive economic crises which have seen the value of the peso plummet. In an attempt to stabilise the currency, the central bank first limited the amount of dollars an individual could purchase each month to $10,000 in September. Just days ago, it drastically increased this restriction to just $100 in physical bank notes per month.

I guess the workaround is buying bitcoin and then taking a trip to another country where you can cash out in dollars using local bitcoins.

  But I think it is too costly and it can make you a loss before using bitcoin for trading. For example, your flight ticket is nearly $ 1k, then you will have to rent a hotel and drink and I think it accounted for more than 1/3 of the price of Bitcoin. Then you will no longer profit. instead of going to other countries why don't we trade OTC? We can contact people who want to sell bitcoins and we can buy it and the bitcoins are transferred to a new wallet and the government cannot control it. right?

[Savemore]

Someone was asking whether they will continue to be holding Bitcoin even when the price is falling down, and yes of course there are people that would continue to hold even when the price of Bitcoin is going down. Some people are getting discouraged because of this price that has decreased recently.

I am not even worried about that, I'm still holding my coins and not minding the price that keeps fluctuating up and down. If you're afraid you can go for asset backed cryptocurrencies. And from what I've been reading lately online, there might soon be a bull run, some people will not believe it because they are afraid, until when it's late that is when they start buying out of FOMO.

That is the problem, people are still holding even it is bear market. They have too much hope even though the market tells them that they are wrong. Even they have a lot of patience, but still they do not have good risk management. They are expecting too much even it is far from reality then should change that kind of mindset because it is not good for them.

[Scotslass]

Someone was asking whether they will continue to be holding Bitcoin even when the price is falling down, and yes of course there are people that would continue to hold even when the price of Bitcoin is going down. Some people are getting discouraged because of this price that has decreased recently.

I am not even worried about that, I'm still holding my coins and not minding the price that keeps fluctuating up and down. If you're afraid you can go for asset backed cryptocurrencies. And from what I've been reading lately online, there might soon be a bull run, some people will not believe it because they are afraid, until when it's late that is when they start buying out of FOMO.

That is the problem, people are still holding even it is bear market. They have too much hope even though the market tells them that they are wrong. Even they have a lot of patience, but still they do not have good risk management. They are expecting too much even it is far from reality then should change that kind of mindset because it is not good for them.

Because any new emerging field everything is hardly predictable. So people think "oh its bitcoin it went from $0.0001 to damn $19k in several years. So if it went down for couple hundreds in a week it is ok, I will hold"
And I can understand them, but I do not support the opinion

[BartS]

I've never heard of Ripio, and my question is can't Argentinians buy bitcoin on some other exchange if they need to?  I assume Ripio is an online exchange and that Argentina's citizens aren't limited as to what crypto exchanges they can use (tho I could be wrong).  Also that mark up doesn't seem too extreme to me.  That sounds about like what you'd get if you were to buy bitcoin at an ATM.

Very interesting article, by the way.  It sounds crazy to me that the gov't would limit the amount of dollars you could buy per month when the economy is suffering so badly.  Hopefully bitcoin can give the people who live there an alternative to cash and that they'll stick with it in the future.  This is exactly what bitcoin was made for.

They do this because they fear that if they do not have those limits everyone is going to begin to buy dollars and they are going to run out of them, that is why those limitations are put in place.

Argentina has been in a very difficult economic situation for years and it doesn't seem like the politicians of that country can resolve the situation which means that is up to each person to decide how they are going to protect their wealth and a good option to do that is bitcoin and a few other altcoins.

[AniviaBtc]

Someone was asking whether they will continue to be holding Bitcoin even when the price is falling down, and yes of course there are people that would continue to hold even when the price of Bitcoin is going down. Some people are getting discouraged because of this price that has decreased recently.

I am not even worried about that, I'm still holding my coins and not minding the price that keeps fluctuating up and down. If you're afraid you can go for asset backed cryptocurrencies. And from what I've been reading lately online, there might soon be a bull run, some people will not believe it because they are afraid, until when it's late that is when they start buying out of FOMO.

That is the problem, people are still holding even it is bear market. They have too much hope even though the market tells them that they are wrong. Even they have a lot of patience, but still they do not have good risk management. They are expecting too much even it is far from reality then should change that kind of mindset because it is not good for them.

You just keep that negativity for yourself only, keep that bad thoughts away here. Mind your own business, we believe that bitcoin will comeback on where it was. It is a proven cryptocurrency in the world. There are a lot of good things that bitcoin brought to us holders.

It just need some time to come back again, maybe not now. I hope that it happens 8 to 10 years from now. Let's be patient and positive all the time because our future depends on it.

[avatar_kiyoshi]

This is the case for Venezuela too. When President Nicolás Maduro threw the economy into the ground with extreme socialist intervention, this drove their economy to the dirt when oil prices fell. Even with oil prices low, they could have made it out had Maduro not taken over all major businesses of the country since 2013. You see Venezuelans adopt Bitcoin when their currency crashes and it's the same story with a lot of South American countries including Argentina. When centralization takes over, people are going to dump their cash into decentralization.

This makes the concept of cryptocurrency as an alternative which is basically better than fiat, but still... Bitcoin / cryptocurrency cannot replace fiat because fiat law applies.

Similar case not only in Venezuella or Argentina, previously a similar case occurred in Greece when their currencies were deflated and Bitcoin became a savior.

[imstillthebest]

This is the case for Venezuela too. When President Nicolás Maduro threw the economy into the ground with extreme socialist intervention, this drove their economy to the dirt when oil prices fell. Even with oil prices low, they could have made it out had Maduro not taken over all major businesses of the country since 2013. You see Venezuelans adopt Bitcoin when their currency crashes and it's the same story with a lot of South American countries including Argentina. When centralization takes over, people are going to dump their cash into decentralization.

This makes the concept of cryptocurrency as an alternative which is basically better than fiat, but still... Bitcoin / cryptocurrency cannot replace fiat because fiat law applies.

Similar case not only in Venezuella or Argentina, previously a similar case occurred in Greece when their currencies were deflated and Bitcoin became a savior.

if crypto were better than local currency why they are still alternative and not fully replace the local currencies of that country  ?  they can still use crypto more often tho and use less fiat which makes crypto better litterally  .

 atlast these countries are the witness or the evidence that crypto is verry useful if ever there is a problem on fiats  .  hoping that other countries will get an idea of it and store/back up crypto in advance before the problem happens  .

[Twentyonepaylots]

This is the case for Venezuela too. When President Nicolás Maduro threw the economy into the ground with extreme socialist intervention, this drove their economy to the dirt when oil prices fell. Even with oil prices low, they could have made it out had Maduro not taken over all major businesses of the country since 2013. You see Venezuelans adopt Bitcoin when their currency crashes and it's the same story with a lot of South American countries including Argentina. When centralization takes over, people are going to dump their cash into decentralization.

This makes the concept of cryptocurrency as an alternative which is basically better than fiat, but still... Bitcoin / cryptocurrency cannot replace fiat because fiat law applies.

Similar case not only in Venezuella or Argentina, previously a similar case occurred in Greece when their currencies were deflated and Bitcoin became a savior.

if crypto were better than local currency why they are still alternative and not fully replace the local currencies of that country  ?  they can still use crypto more often tho and use less fiat which makes crypto better litterally  .

Because basically crypto cannot take over the fiat due to economics law tha applies to it. Indeed crypto is better than fiat when talking about different aspect of conveniency in currency but it does not end there. Literally speaking crypto is better than fiat buy the government still does not believe in capability of cryptocurrency in ruling their financial system.

 atlast these countries are the witness or the evidence that crypto is verry useful if ever there is a problem on fiats  .  hoping that other countries will get an idea of it and store/back up crypto in advance before the problem happens  .

Crypto seems like the safe haven of declining economy, I've seen some countries that already did this. Since bitcoin and other crypto can save them why they don't have fully implement it yet? simply because it is decentralized.