Argentina’s annual inflation rate surpassed 100% in February, marking a 30-year high since the nation’s hyperinflationary period in 1991.
Meanwhile, Bitcoin has appreciated against the Argentine Peso by 20% over the past year, despite posting a 34% drop against US dollars over the same period.
Government data released on Tuesday showed a Consumer Price Index (CPI) increase of 6.6% across the month alone, alongside a 13.1% year-to-date rise.
The rapid debasement of the nation’s 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 endure surging costs that rise weekly.
“The other day I came and asked 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 take everything out and leave just the tomatoes because I don’t have enough money,” Devita said.
Argentina had one of the top ten highest inflation rates in the world in 2022 – and has nearly doubled from last March’s rate of 55.1%.
The region also has a relatively high crypto adoption rate, ranking 13th in Chainalysis’s 2022 crypto adoption index, despite the nation’s central bank clamping down on crypto-related services.
Nigeria and Turkey led Argentina in that same index – countries that also face troublesome inflation that only serves to boost crypto adoption. Due to its fixed supply, Bitcoin bulls often regard the asset as a long-term inflation hedge.
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 reacts strongly to central bank policy, however: the asset is up 30% this week after the Federal Reserve injected $300 billion in loans to qualified banks.
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