On April 18, the BTC-to-ARS exchange rate surpassed more than 6.59mln Argentine peso

Last week, Bitcoin’s price hit a record high in Argentine peso terms after continued inflation in Argentina.

On April 18, the BTC-to-ARS exchange rate surpassed more than 6.59mln Argentine peso, as per aggregated price data tracked by Google Finance.

Since the record high, the rate has corrected to nearly 6mln peso, 9 per cent lower, but still over 100 per cent higher YTD.

The growth of Bitcoin in the Argentine markets comes amid ongoing devaluation of the peso. For example, traders were paying as less as 460 peso to purchase $1 from the black market on April 24 — more than double the official spot rate that pays 220 Argentine peso for the dollar.

FMyA, a US-based consultancy company, noted that the Argentine central bank’s reserves have declined by half to around $1.3bln since 2019.

That has increased the risks of more peso devaluation, which has dived 99 per cent from the currency crisis high of 330 peso in 2018. That has driven Argentines to look for haven in the dollar, which is in short supply now because of increasing demand in the country.

At the same time, Bitcoin and other crypto currencies operating outside the scope of governments and central banks are growingly coming up as alternatives. For instance, data shows that Bitcoin’s P2P weekly volume in Argentina hit a record high of around $30mln in March on the Paxful exchange.

Moreover, a study last year found that around 60 per cent of Argentines believe in Bitcoin’s potential to preserve the value of their savings in the long term.

Earlier in April, the CNV, Argentina’s securities regulator, approved a Bitcoin-based futures index on the Matba Rofex exchange scheduled to launch in May. The derivative, settled in pesos, will permit accredited investors to gain exposure to the Bitcoin markets.