Bitcoin Demand in Argentina Reaches Highest Point in 20 Months
Bitcoin continues to be one of the most in-demand digital currencies among investors in Argentina. The local fiat pesos have continued to experience devaluation against the USD.
As per a Cointelegraph article, the value of Argentina’ fiat currency declined from $0.0049/peso in March 2023 to $0.0012/peso. The citizens of the nation have used digital currencies as a store of value to preserve the declining value of their savings.
As a result, the nation witnessed the highest demand for Bitcoin in 20 months as per a recent report. On 20th March, Bloomberg shared data projections from crypto exchange Lemon Cash noting that around 34 thousand customers hailing from Argentina purchased Bitcoin before 10th March. The amount was twice the weekly average in comparison to the same time last year.
The analysts have attributed the rise in Bitcoin investments to the declining value of the national currency. During the last 12 months, the value of pesos against USD declined visibly. However, notably Lemon exchange was not the only platform seeking a surge in demand.
Other major exchanges operating in Argentina such as Ripio and Belo also share similar projections. As per Belo CEO, Manuel Beaudroi stablecoin purchases in Argentina declined from 70% to 60% after Bitcoin’s price increment led to greater interest.
Investors in Argentina Continues to Purchase More Bitcoin
During the period of Bitcoin’s price appreciation inflows into the flagship cryptocurrency surged. The stablecoin trading volume became more pragmatic and used several times as a payment vehicle.
The analyst Beaudroi further noted that Belo trading volume in Bitcoin and Ethereum increased by ten folds in 2024 in comparison to the same duration last year.
Furthermore, another report suggests that interest in stablecoin has remained existent. Argentina has the option to refrain from using well-known exchanges operating in the region to purchase these currencies and add them to their trading portfolios.
On 12th February, Cointelegraph noted that Argentinians have reverted to black market platforms that are colloquially known as crypto caves.
These platforms allow the local investor to purchase USD-backed stablecoins outside of the strictly regulated currency control platform amidst the rising inflation pressure on pesos. On the other hand, the use of digital currencies for specified transactions has also started to gain traction within the region.
Diana Mondino, the Foreign affairs minister claimed that a decree aimed at economic reform and deregulation will create of ease-of-access for Bitcoin and other digital assets in the country under the regulated environment.
US Macro Data Confirms Looming Inflation
A Bitcoin price analysis published in Cointelegraph Markets Pro on 14th March indicated that Bitcoin price declined after the publication of inflation data in the United States.
The article reconciled projections with TradingView to study the impact of PPI (Producer Price Index) on Bitcoin. Bitcoin prices plunged by 3.3% following the publication of the PPI and CPI (Consumer Price Index) projections.
The projections issued 48 hours prior to Bitcoin price changes are indicative of looming inflationary pressure. These metrics also pointed towards corrective policies from the Federal Reserve that could lead to interest rate hikes at a higher rate and for longer durations as per Tedtalksmacro on social media.
The next meeting of the Federal Open Market Committee to be held on 20th March was already opting to refrain from barring interest rate cuts.
The analyst further stated that even when macro is secondary to institutional flows, there is a lack of clarity on cryptocurrencies that’s shaping the prices at present. Meanwhile, the projection from CME Group’s FedWatch Tool, rate cut at the upcoming FOMC meeting in May was 6.2% at the time of writing.
Considering the bigger picture for Bitcoin prices Rekt Capital has retained a stable stance. He noted that probable upside and downside need time to resolve before continuation.
Rekt Capital Stance on Bitcoin
Rekt Capital posted his observations on the social media account noting that historically Bitcoin ATHs are not uninterrupted uptrends. He claimed that Bitcoin ATHs have been subjected to a lot of volatility but once the volatility stabilizes things get clearer. He further talked about upcoming price discovery.
Meanwhile, analyst Jelle claimed that Bitcoin prices can consolidate during the later trading sessions while retaining weakness during open. Dann Crypto Trades wrote that Bitcoin volatility was concentrated around US Market Open hours.
He stated that recent price corrections happen at market opening and whenever an ETF goes live. The late US and Asia trading session has indicated price recoveries out of the downside price corrections.
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