While the sustained fall in cryptocurrencies has wiped out billions in wealth and pushed El Salvador to the brink of default, Argentines are sticking with digital money as a hedge against inflation and a weak currency, the NYT’s Ana Lankes reports. While bitcoin’s fall was nearly twice that of the peso, from $65,000 in 2021 to around $24,000, the history of economic crisis and currency erosion means that many Argentines have more faith in crypto than the peso.
With inflation expected to reach 90% by December, the government repeatedly printed pesos to afford budget deficits, making saving near-impossible for most households. Government moves to try to discourage Argentines from buying dollars to hedge against continued inflation have transformed cryptocurrencies such as ether and bitcoin into natural inflation hedges.
More than a third of Argentines said they trade cryptocurrencies at least once a month, with a similar figure keeping savings in crypto, according to Morning Consult. Other countries such as Nigeria and Venezuela show how inflation-hedging may be the assets’ best use case, but the nearly 60% of Argentines who believe bitcoin will retain value better than the peso highlights the future for such projects—despite the current “crypto-winter”—amid ever-decreasing trust for governments in emerging markets.
Comments