Bitcoin (BTC) transaction volume soars after reports surfaced that Argentina might be heading towards a possible ninth sovereign debt default, data from LocalBitcoins says.
BTC transaction volume has reportedly increased in Argentina. According to a report of the Arcane Research, more Argentines have been “dumping record amounts of pesos for BTC on LocalBitcoins.”
Incidentally, this happened at a time when there are circulating reports saying Argentina might default on its debts yet again. It is made worse by the rising inflation rates that continue to devalue their local currency.
(1/2) Argentines are dumping record amounts of pesos for #bitcoin on @LocalBitcoins, as the government is about to default on its debt (https://t.co/rSYFq8gDSD) and the currency is suffering from inflation. (Source: @Coin_Dance) pic.twitter.com/oTFYadike4
— Arcane Research (@ArcaneResearch) April 23, 2020
Weekly LocalBitcoin trading volumes rise amid ‘gloomy’ financial situation in Argentina
From January 2018 until today, Arcane Research pointed out that the weekly trading volume on LocalBitcoins and the Argentine peso has recorded a 1,028% rise. The researchers added that the increase in BTC volume is at 407%, and 139% for the U.S. dollar.
According to a report from the Financial Times, Argentina could potentially register its ninth default as they worry over the outcome of their debt restructuring arrangements. This includes its US$44 billion [AU$68 billion] loan negotiation with the International Monetary Fund (IMF).
Alex Mashinsky, chief executive officer of crypto lending platform Celsius Network, said in an interview that betting on BTC amid the gloomy financial situation all around the world today is a bet that “deflationary pressures will win.”
Mashinsky: ‘BTC looks more stable than the stock market’
Mashinsky adds that even if BTC seemed to be a volatile market in the past, it has been more than capable of weathering the coronavirus-induced market crashes.
“BTC looks more stable than the stock market — it only moves 2% a day, and the stock market moves 5–10%,” Mashinsky said.
Apparently, even the Central Bank of Argentina (BCRA) has caught wind of the growing interest for cryptocurrency and the blockchain. According to some reports, BCRA has begun its testing of a “new interbank clearing system” that utilizes blockchain technology for functioning smart contracts.
BCRA partnered with the IOV Labs after it started developing the proof of concept for its RSK Bitcoin smart contracts.
Rising interest in BTC trading
It is not only in Argentina, however, where a looming financial crisis triggered a massive wave of BTC transactions.
In countries like Venezuela, where their local currency plummeted in value because of hyperinflation, BTC trading volume has recorded all-time highs.
There are even speculations that Americans have begun jumping aboard the BTC ship amid the coronavirus pandemic.
Recently, there were reports that revealed a sudden increase in the volume of BTC purchases in the same amount as that of stimulus dole-outs the U.S. government gave this month.
From what it looks today, BTC transaction volume data suggest that people believe it to be a ‘safe haven’ asset, especially in countries that are experiencing financial turmoil.
Featured image courtesy of Burak K/Pexels