Argentina is now trading more Bitcoin than ever. Almost.
Last week, Bitcoin trading in Argentina exploded to a record-setting volume of 101 million Argentine pesos (roughly $1.4 million USD). The previous all-time high for weekly BTC volume, measured in the local currency, was almost half that at 69 million. The surge in BTC trading comes amid what could potentially be Argentina’s worst economic recession in its troubled history.
News of the Bitcoin trading spike was shared today by peer-to-peer Bitcoin exchange LocalBitcoins over Twitter, which described the event as a new “absolute record” for the country. But that isn’t exactly true.
LocalBitcoins: new absolute record in Argentina
"Other notable peaks have occurred in South Africa, Tanzania, Peru, Chile, Nigeria, Kenya and Brazil, while recently there have also been peaks in Japan, Mexico and Egypt."https://t.co/N09nGynjMR
— LocalBitcoins.com (@LocalBitcoins) July 7, 2020
In fiat terms, yes, Argentines went from trading 59 million pesos worth of Bitcoin for the week ending on June 27 to breaking the 100 million pesos barrier the following week. In US dollar terms, volume skyrocketed from $500,000 in weekly BTC volume to $808,000, according to analytics site Useful Tulips. (Conversion rates from Morningstar have the peso valued slightly higher, which place BTC volumes in Argentina going from $800,000 to $1.4 million.)
But in terms of the actual number of Bitcoins traded, the 92 BTC moved last week, though a significant increase week over week, pales in comparison to the absolute record of 228 BTC reached in April 2016. Still, since then, Argentina had not come close to these numbers until last week. And any way you slice it, Bitcoin trading volume in the country has doubled since the end of June.
The milestone, however, should not come as a shock, given the current state of Argentina’s economy. Traders in the country are presumably seeking safe haven assets (or, at least, relatively safer assets) as the financial crisis deepens.
The policies of Argentina’s former president, Mauricio Macri, led the nation to hold the infamous title of nearly the most “miserable country” on earth—second only to the economically embattled Venezuela. And the more progressive policies of the recently elected Alberto Fernandez do not seem to be producing the miraculous results that many in the country had hoped for.
Bitcoin, meanwhile, has gained ground in Argentina as an alternative currency and a store of value. So much so that there is now an indicator, known as “Bitcoin dollar,” that provides an approximate price of the dollar based on the cost of Bitcoin in local markets, to go alongside the “blue dollar” and other informal rates for the US dollar in Argentina. These types of informal rates for black market dollar trading are also common in Venezuela, another country that regularly breaks “records” for Bitcoin trading on P2P platforms.
In crisis, there is opportunity, so the saying goes—and it appears that this might be the case for Bitcoin in Argentina.