As Argentina’s inflation climbs, Bitcoin gains popularity over fiat currencies, driving increased crypto purchases and scam activity.
In Argentina, where inflation has surged to staggering levels, Bitcoin is emerging as a preferred hedge against economic instability, Bloomberg reports, citing data compiled by a local crypto exchange Lemon Cash.
Lemon Cash’s data reveals a significant uptick in Bitcoin transactions, nearing their highest weekly value in 20 months. The surge appears to coincide with President Javier Milei’s implementation of shock therapy policies aimed at revitalizing the economy, prompting Argentines to seek alternative means of financial security.
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With the country grappling with an annual inflation rate of 276%, citizens are increasingly turning to Bitcoin to protect their wealth.
Lemon reports nearly 35,000 Bitcoin purchases in the week ending Mar. 10, doubling the weekly average from the previous year. Similar trends are noted across other exchanges in Argentina too. Blockchain analytics firm Chainalysis earlier noted in a research report that Argentina leads Latin America in raw crypto transaction volume with an estimated $85.4 billion in value received, and is second in the region for grassroots adoption.
As Bitcoin gains traction as an alternative investment, Argentines are diversifying their portfolios to safeguard against inflation.
However, this growing interest in crypto has also led to a rise in scam activity. Bitcoin Argentina, a local non-governmental crypto organization, reports a fivefold increase in crypto-related scams in February this year, prompting warnings from Gabriela Battiato, the organization’s head of legal, about the risks associated with impulsive investment decisions in the volatile crypto market.
Read more: Can a crypto-friendly leader change Argentina’s economy amid hyperinflation?
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