It seems increasingly apparent that Argentines have now begun using cryptocurrency as an alternative to their national currency, with the number of people using bitcoin exceeding 1 million in recent months.
There are many factors contributing to the rise in users. Argentines have no option but to purchase bitcoin, as they have been banned from buying US dollar.
The South American country is home to the second-largest number of bitcoin ATMs in Latin America. In addition, the country’s public transport agency has long allowed people to pay for bus and railway tickets in bitcoin.
Argentina is ranked 28th out of 142 countries in the world in the most recent global cryptocurrency adoption index prepared by market analysts firm Chinalysis.
But the increasing appetite for digital currency is worrying economists. Cryptocurrencies are not reliable and are vulnerable to volatile fluctuations. More than anything else, they are not under the control of any central banks.
Due to the low-interest rate regime in the United States, investors are splashing out money on just about every riskier asset, including stocks and cryptocurrencies. As a result, bitcoin recently smashed through the 34,000 marks, prompting market analysts to predict its potential crash.
Argentina, whose economy is already in shambles, will be the worst hit if the prediction comes true.