Argentina’s annual inflation rate exceeded 100% in February, marking a 30-year high since the country’s hyperinflationary period in 1991.
Meanwhile, Bitcoin has appreciated 20% against the Argentine peso over the past year, despite falling 34% against the US dollar over the same period.
- Government data released on Tuesday showed a 6.6% rise in the consumer price index (CPI) in the month alone, alongside a 13.1% rise since the start of the year.
- The rapid depreciation of the national currency can be felt in real time by its citizens. Irene Devita, 74, told the Guardian that her community is struggling to afford anything as they face rising costs every week.
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“The other day I came to ask for three tangerines, two oranges, two bananas and half a kilo of tomatoes. When he told me it cost 650 pesos [$3.22]I told him to take everything out and leave only the tomatoes because I don’t have enough money,” Devita said.
- Argentina had one of the ten highest inflation rates in the world in 2022 – and nearly doubled from 55.1% last March.
- The region also has a relatively high crypto adoption rate, ranking 13th in Chainalysis’ 2022 rankings. crypto adoption indexdespite the country’s central bank Tightening on crypto-related services.
- Nigeria and Turkey lead Argentina in this same index – countries that also face troublesome inflation it only serves to boost the adoption of crypto. Due to its fixed supply, bitcoin bulls often view the asset as a long-term hedge against inflation.
- On the contrary, central banks overseeing relatively stable currencies, such as the Bank of Canada, argue Bitcoin is not an inflation hedge due to its relative volatility.
- Bitcoin, however, reacts strongly to central bank policy: the asset is up 30% this week after the Federal Reserve injected $300 billion in loans to qualified banks.
