Amid serious economic obstacles and the devaluation of the national currency, Argentines have identified cryptocurrencies as the most effective way to protect their funds. With the local economy continuing to suffer and the devaluation of the Argentine peso, more than 73% of participants in a recent survey voted that cryptocurrencies are the most efficient saving mechanism. Almost as many replied that they had invested in at least one digital resource.
Argentina's economy after the COVID-19 blockades
The South American country had suffered even before the government took extreme measures in an effort to combat the growing threat of COVID-19. Argentina was one of the first nations in the region to introduce nationwide blockades, which worked by initially reducing the number of infected.
However, over time, the number of confirmed COVID-19 cases has grown, but the country's economy has only gotten worse. In April 2020 there was a 26,4% decline in raw GDP compared to the same month of the previous year.
Even in May, despite the easing of measures against COVID-19, the percentage fell by 20,6. A report by the Municipal Bank Foundation exemplified the true extent of the impact for citizens by stating that every point of decline in GDP corresponds to a point and a half decrease in formal wages.
The local economy pushes citizens towards cryptography
According to a survey conducted by the popular peer-to-peer cryptocurrency exchange Paxful, it appears that Argentines are already looking for a solution outside the traditional financial space. The report states that out of 1.113 participants interviewed, 73,4% (817 people) voted that "cryptocurrencies are the most effective way to save and protect their funds".
The responses also showed that Argentines tend to steer clear of the local currency, as the Argentine peso has lost nearly 90% of its value against the US dollar in the past five years alone.
70% of respondents added that they have invested at least once in some digital assets, citing as their main reason “the ability to provide economic shelter from the depreciation of the local currency due to inflation”.
When asked about their perception of Bitcoin in particular, voters replied that they had bought bitcoin with PayPal after evaluating its global potential and identifying its decentralized nature as a significant merit.
49% noted that the asset could provide greater security within an otherwise tumultuous banking system. Paxful's Latin American manager Magdiela Rivas highlighted the growing demand from Argentines for cryptocurrencies.
The exchange has seen a 37,5% increase in volume since the start of 2020 and even more after the COVID-19 crashes. Another P2P digital asset exchange, LocalBitcoins, has seen a surge in Bitcoin trading volume by Argentines. According to data from coin.dance, the volume of BTC P2P reached a new all-time high in early August after a continuous expansion lasting weeks.
