The traditional strategy of exchanging Argentine pesos for U.S. dollars is being replaced by investments in Bitcoin

The traditional strategy of exchanging Argentine pesos for U.S. dollars is being replaced by investments in Bitcoin, which have shown better performance recently. Data from Lemon, a local cryptocurrency exchange, reveals that Bitcoin purchases have reached their highest level in 20 months as Argentines seek alternatives to the dollar, whose value has been controlled due to President Milei’s policies.

As the fever for the dollar wanes in Argentina, Bitcoin gains traction Bitcoin is gaining popularity in Argentina as an alternative to the U.S. dollar amidst the country’s high inflation rates. Lemon, one of Argentina’s largest exchanges, reports that Bitcoin purchases have surged to a 20-month peak, totaling nearly 35,000 transactions in the week ending March 20.

This upward trend has been consistent, with over 27,000 Bitcoin purchase transactions recorded in the preceding week. Analysts view this surge in Bitcoin adoption as unusual, given that Argentines have traditionally turned to the U.S. dollar to hedge against their country’s economic challenges.

While other Latin American countries have been more receptive to Bitcoin and other cryptocurrencies as investment instruments, Argentina has taken a different approach. According to a Lemon report from February, 80% of crypto purchases in Argentina in 2023 involved stablecoins, with 70% of deposits linked to Tether’s USDT, the largest dollar-pegged stablecoin in the crypto market.

This shift is not unique to Lemon, as Belo, another local wallet provider, has reported a tenfold increase in purchases of ether and Bitcoin compared to the same period last year. Belo CEO Manuel Beaudroit noted that the Bitcoin bull market has impacted the popularity of stablecoins.

Beaudroit explained:

“When users see Bitcoin’s price rising, they tend to buy Bitcoin, while stablecoins are often used pragmatically for transactions, serving as a means to make international payments.”

The surge in Bitcoin and stablecoin adoption may be attributed to the relatively stable performance of the Argentine peso against the U.S. dollar. President Javier Milei’s economic policies, which prioritize fiscal discipline and rebuilding central bank reserves, have helped stabilize the dollar’s value in Argentina.