Posted 2 years ago | by Bethany Armstrong
‘Buy Bitcoin’ Says Expert as Argentina Imposes $10K Limit for Citizens
Bloomberg reported on Sep. 1, Argentina reintroduced capital controls due to their currency, the Argentine peso (ARS), losing against major flat currencies, such as the U.S. Dollar. This economic move means that citizens and businesses are limited in their freedom to buy foreign currency.
Since access to hard currency is restricted to just $10,000 ARS for individuals and businesses to exchange on the international market, the demand for Bitcoin, a cross-border asset which is impossible to control, should increase.
Argentina Turns to Bitcoin
Argentina's population has shown an interest in Bitcoin (BTC) in recent times, with trade volumes accelerating even as economic uncertainty grew. The exchange rate between USD and ARS fell 34% since August 2nd. However, also in August, a premium appeared on the country’s cryptocurrency exchanges.
Nonetheless, some experts suspect “Buy Bitcoin,” cryptocurrency-focused attorney Preston Byrne for fuelling the interest in alternative technologies, as he is responsible for tweeting the news that the volume data showed Argentinians trading more in ARS on P2P crypto exchange Localbitcoins last week. This trend may continue, if socio-economic circumstances follow those of embattled Venezuela.
Although presently, Argentina’s economic woes do not match those of Venezuela, Bitcoin advocates appeared months before in an attempt to pre-empt the crisis.
As Cointelegraph reported, billionaire investor Tim Draper even met with the country’s president earlier this year to discuss the possibility that Bitcoin would outperform the ARS.
Should Draper win his presidential “bet”, he demanded that Argentina shun the peso altogether, adopting Bitcoin as its new official state currency.
“That would be a perfect decision, as there's a lack of confidence in this coin,” he reportedly commented at the time of the meeting in March. The ramifications of such a drastic move in terms of a national currency remains to be seen.
New Heights for BTC
Bitcoin has recently hit all time high prices in Argentine Pesos. It now requires nearly AR600,000 to buy a single Bitcoin, which is more than double the peaks that the world's most valuable crypto by market cap hit during late 2017.
While BTC prices still remain below their 2017 highs in major currencies, many of the minor currencies are seeing new heights for BTC.
Not only does BTC apparently make a good insurance policy against fiat devaluation, it also seems to ensure that trade can continue, despite the legal manoeuvrings of struggling governments.