Last week, the price of bitcoin reached a record level in Argentine pesos following persistent inflation in Argentina. The exchange rate of bitcoin surpassed 6.59 million pesos on April 18, according to aggregated price data tracked by Google Finance.
From its peak, the rate corrected to around six million Argentine pesos, a decline of 9 percent, but it has still increased by more than 100 percent compared to the previous year.
The rise of bitcoin in Argentine markets coincides with the ongoing devaluation of this Argentine currency. For example, traders were paying as much as 460 pesos to buy one dollar on the black market on April 24, which is nearly double the official spot rate of 220 pesos per dollar.
FMyA, a consulting firm based in the U.S., highlighted that the reserves of the Argentine central bank have halved to an estimated 1.3 billion dollars since 2019.
This has increased the risks of further devaluation of the peso, which has collapsed by nearly 99 percent from the peak of the currency crisis in 2018. This has led the local population to seek refuge in the dollar, which has become scarce due to rising demand in the country.
At the same time, bitcoin and similar cryptocurrencies operating outside the purview of governments and central banks are increasingly emerging as alternatives. For instance, data shows that the weekly volume of bitcoin in Argentina reached a record level of nearly 30 million dollars in March on the exchange Paxful.
