The Argentine peso will have difficult times, could it be bullish for Bitcoin?
Bitcoin, the world’s number one cryptocurrency by market capitalization, has been defended by many as adequate coverage against the often reckless and selfish economic policies of governments. This includes episodes of currency devaluation caused by the threat of such policies.
That is happening right now in Argentina. Today, the national currency, the peso, has plummeted by almost 25 percent against the US dollar.
Does economic instability lead people to Bitcoin?
The Argentine peso fell about 25 percent in some foreign exchange markets, as trade opened this morning. Press reports affirm that the cause of such a fall is the strong defeat suffered by President Maurico Macri in the primary elections of this weekend’s party.
The current center-right head of state scored 15 points less than his center-left opponent, the Peronist candidate Alberto Fernández.
According to a report in France24, Fernández commented this morning on the result of the elections in a national radio station:
“The president cannot have peace of mind. The markets are warning that the government has put itself in a position to which it cannot respond. ”
It seems that the threat that Fernandez, more leftist and practical in the economy, takes power in the nation at the expense of the Macri pro-business, has caused capital to quickly leave Argentina’s economy.
Such a sudden decline makes even Bitcoin volatility seem relatively moderate. It also serves as a reminder of the apparent emerging utility of cryptocurrency as a “safe haven” asset.
Some cryptocurrency advocates have argued that the recent price increases seen during much of 2019 have been caused by similar instances of capital flight elsewhere. It is believed that Chinese citizens are buying Bitcoin to protect themselves against their government by “arming” their currency against the US dollar in the ongoing trade war.
Others believe that a more extreme form of currency devaluation, such as the one that plagues Venezuela in recent years, will be the reason for “hyper-Bitcoinization,” or the massive rejection of the fiat currency issued by the government in favor of Bitcoin The concept of hyper-Bitcoinisation is widely discussed in this article from the Nakamoto Institute of 2014.
Being immune to the inflationary pressures that Central Banks and governments around the world use to balance their books, Bitcoin’s hard monetary policy, applied by the most powerful computer network on the planet, is attractive to many as a hedge against currencies of their own nations. In fact, popular Bitcoin evangelist Andreas Antonopoulos often tells him by persuading his Greek mother to put some of his retirement savings into the cryptocurrency to protect his wealth from the emergency banking restrictions established after the collapse of the banks of the nation.
Users and some non-believers in the culture of blockchain-bitcoin technology, have a hard time convincing themselves that there are other possibilities to protect the family’s assets, only those who risk seeking information and breaking paradigms can have the satisfaction of seeing that there is another financial system that will help us and that the possibilities are built with financial education, then economic freedom will come. It is expected by new announcements.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.