Following a sudden drop in the value of the Argentinian currency, investors are now going crypto to safeguard their assets.
The Argentinian currency lost about 30% of its value recently; people and investors alike, worried about the shaky economic conditions present are now opting for bitcoin to cover their assets, as they fear that the falling economy will quickly devalue their Assets.
Following this development, Argentina has now witnessed a bullish run, as more people are buying. Bitcoin is currently trading at a 4% premium in Argentina, and the figure could go up shortly.
The value of trading for bitcoin was recently at $11750 in Argentina, while in the meantime, the global price of bitcoin stood at $11330, a clear difference.
A panic mode initiated by the removal of the incumbent president has rallied investors against the peso, Mauricio Macri lost in the presidential elections, and these political eventualities sent the peso on a downward spiral losing up to 30% in the process. Shortly after the announcement of the poll results, bitcoin surged past $12300 according to statistics as seen on Monday.
The value of the peso against the dollar was initially at 45 pesos, however, after the news of the defeat, the peso traded at 59 but later went on to settle at 53. This is a clear indication that the markets were not prepared for such an eventuality and Mauricio Macri was surely going to win.
Sentiments from the Incoming President
Alberto Fernandez, the president-elect, was very critical of the ousted president; he blasted him for the way he ran down the economy during his tenure by choosing short-term debt over the long term, which rose to unsustainable levels over the years and made repayment of the debt intolerable. Fernandez has further claimed that bond prices indicate the country is in default and more investors will shun it going forward.
Just like what was witnessed between the America-China currency wars, bitcoin became safe heaven, and it saw a price surge at the time. A similar trend has been set in this situation, bitcoin is now trading at a 4% premium, and it is poised to perform even better going forward. During political turmoil, when other money markets are usually at the receiving end, falling at the outcomes of elections, bitcoin is always on a surge. The new Argentinian president hopes to take Argentina out of this economic mess and make it flourish once more, however, in the meantime, due to uncertainties; the country will see a massive uptake of Bitcoin.