Argentinians Seek Refuge in Bitcoin After Political Instability Hits the South American Nation
Argentinians woke up to a blood bath on Monday as the country’s currency plummeted after Mauricio Macri’s party “Together for Change” lost a key primary election. The results from this week’s voting suggest Macri will face major resistance as he and his party enter the general elections this October.
The Argentine Peso fell over 45% against the US dollar Sunday night and Argentinian companies listed on U.S. stock markets also suffered extreme losses across the board, with about a third of those companies losing more than half their value. BBC’s South America Business Correspondent Daniel Gallas said in a statement: “At the end of trading on Monday, Argentina’s main Merval index closed down 31% as some of the country’s largest companies saw their market values plummet. Cement producer Loma Negra was among those worst affected, with its share price down around 55%. Financial services firm Galicia Financial also saw a 46% drop in its stock value.” Simply put, the country is in a great deal of trouble. The bigger question is how will Argentina and its citizens deal with this level of political uncertainty and turmoil.
Meanwhile, Bitcoin in Argentina was being purchased for US$12,800 – a $1,400 premium to the price reported on CoinMarketCap. A few days ago, our team published an article about how Bitcoin has become a safe haven investment during times of economic instability. Although Bitcoin’s awareness in Argentina is very low and, if anything, largely used as a speculative asset, the cryptocurrency was in high demand on Monday with Argentinian investors hedging their investments with Bitcoin and other “safety” assets like gold and USD during one of the worst political and financial crises the country has ever seen.