Trade volumes on LocalBitcoins (LBC) have hit a new all-time-high in Argentina, having spiked days after President Trump’s announcement that the U.S. intends to place tariffs on Argentinian metal imports.
The new high comes as the climax to a year of rising BTC volumes on local exchanges in Argentina, widely assumed to have been triggered by the hyperinflation and spiraling national debt that characterize the nation’s ongoing economic crisis.
Trump’s Reign of Terror
President Trump added to the nation’s already-substantial list of economic woes last Monday, reinstating steel and aluminum tariffs against Argentina and Brazil on the alleged grounds they have been devaluing their currencies. On Dec. 2, President Trump tweeted:
“Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries”
Argentinians bought more than 22.2 million Argentine Pesos (ARS) worth of Bitcoin on LBC in the wake of the Trump announcement. This is a new high even when factoring in inflation rates (the ARS has lost 38% of its value against the U.S. dollar this year). This is almost identical to what took place two months ago.
Bitcoin is seemingly a backup plan for Argentinians
Time and time again, Argentinians have appeared to flock to Bitcoin in response to economic shocks. In August, BTC rocketed to a $900 premium above Coinbase on one of Argentina’s top exchanges after an unexpected election result cast doubts over whether the nation would receive a $57.4 billion bailout package, and sent Argentinian markets plunging in one of their biggest intra-day losses in history.
Once again, in September, volumes erupted across Argentina’s exchanges when President Mauricio Macri announced a plan to reinstate capital controls — this time BTC was sent to a staggering $2,250 premium above the market.
As reported previously, LocalBitcoins is seeing exceptionally high usage in nations where the unbanked make up for the larger share of the society — indicating Bitcoin is increasingly being bought as an unconfiscatable, deflationary hedge against fiat.
The fiat/crypto thesis was probed last week by Deutsche Bank, who suggested crypto could replace fiat by 2030 in the event of global hyperinflation.
Argentina’s Troubled Streak
In October, the Argentine government placed restriction on the usage of digital assets following the inauguration of a new president. The reasons behind the inflated price seem to be because of the restrictions on access to dollars imposed by the Central Bank of Argentina as a measure to preserve the country’s monetary liquidity.
For every dollar in Bitcoin, Argentines paid more than 90 Pesos. The price of the fiat dollar is around 59.5 Argentine Pesos according to Bloomberg Markets. It seems that Argentine’s are recovering from the shock of having a new president.
Meanwhile, they are steadily feeling better with the idea of being their own bank, and Bitcoin is emerging as a hedge in the face of an economy that is currently undergoing one of the most painful episodes in modern history.