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Argentinians Adopt Cryptocurrency because of Ongoing Inflation
In North America, cryptocurrency presents itself as an appealing speculative investment. In other parts of the world, cryptocurrency is much more than that. Sometimes, it is the only thing that can bring stability to a region that is plagued by inflation and crime. The adoption of cryptocurrency by Argentinians is way up in 2020, as inflationary triggers further devalue the already hyperinflated peso. Since the beginning of 2020, one exchange has reported a 37% increase in the amount of volume on its platform. This number is not all that surprising considering much of the world is going through some sort of inflationary event in general. This trend of increased volumes on cryptocurrency exchanges is likely to spread, and continue.
Paxful, The Argentinian Exchange
The exchange that reported a 37% increase in volume is Paxful. This is in line with another statistic from an Argentinian survey. As many as 73% of Argentinians believe that cryptocurrency is the most effective way to hedge against inflation. Considering current economic conditions, inflation is likely to continue. This means that Argentinians are going to need a plan to protect themselves against the dangers that inflation brings. It is possible that countries like Argentina, through exchanges like Paxful will fuel significant price surges through periods of high inflation.
Inflation Leads to Crime
One of the aspects often left out of the inflation conversation is the corresponding rise in crime. A common trend in countries where hyperinflation has taken place, or is currently happening is kidnapping. In some cases, these kidnappings are only so that the kidnapper can take the kidnapped to the bank to withdraw all of their money. Access to cash, as invaluable as it may become, is still incredibly important to supporting economies. In some cases, cash may be the only way for citizens to exit the asset and purchase a more stable one like Bitcoin, or the USD. Your money is a lot more difficult to freeze, or steal, if it is not local to where you are. Twelve words in your head is a lot more difficult to steal than money under your bed. This creates yet another appealing use case for those who live in hyperinflated areas of the world.
Most Argentinians Own Cryptocurrency
Adoption is already taking place in Argentina. The reality is that they’ve been living in a hyperinflated state for at least 20 years now. Inflation is not a risk they need to consider like most of us in developed nations. For them, it is an ongoing reality that needs to be dealt with. That may be why 70% of Argentinians already own some sort of cryptocurrency. This fact is alarming because it is the acknowledgement of a fact, as well as an understanding of what is really taking place. Inflation needs to be taught to people of all ages in developed nations because for most people, it’s never been a problem. Prices have always been stable. So suggesting that buying cryptocurrency as a hedge against inflation certainly sounds like a far fetched idea. Argentinians already know this. For Argentinians, cryptocurrency is the perfect solution to combat ongoing inflation.
