By CCN: The bitcoin price surged overnight within touching distance of $9,000, carving out a new 2019 high. In just minutes, the bitcoin market cap pushed beyond $150 billion for the first time since May 11th, 2018.
But Monday’s price explosion is even more impressive in Argentina. As CCN reported earlier this month, BTC blew past its all-time high against the Argentine peso in the latest rally. As hyper-inflation devalues the Latin American currency, bitcoin is now in uncharted territory.
It confirms bitcoin’s narrative as a hedge against inflationary currencies. And it strengthens bitcoin’s case as a store of value. Even with 80 percent swings, bitcoin has held its value better than a major country’s currency.
BTC record high against Argentine peso
Thanks to last night’s price rise, bitcoin cruised towards 400,000 Argentine pesos (ARS). The move was preceded by huge volume in bitcoin transactions from the South American nation. In recent weeks, BTC transaction volumes hit almost $14 million weekly through LocalBitcoins.com, a peer-to-peer bitcoin exchange.
Argentina is not the only country to experience this phenomenon. Bitcoin plots a similar chart in Sudanese pounds. As CCN previously reported:
“Even if you bought the top of 2017’s bitcoin bubble in Argentine pesos, you’d be in profit right now. As for the Sudanese pound, if you bought the crypto top, you’d have doubled your money today.”
The 2017 bitcoin bubble looks very different in Argentina
For many of us in the crypto space, the BTC/USD chart is etched into our brains. The wild 2017 run-up and 2018 crash is burned into our memory. But the chart looks refreshingly different when priced in ARS. The infamous “bitcoin bubble” looks like any other price peak.
— Riccardo Masutti ⚡️ (@RiccardoMasutti) May 24, 2019
Of course, this is less about bitcoin’s rise and everything to do with the peso’s collapse.
But it helps prove bitcoin’s case as a store of value. In developing nations with unstable economies, BTC is less volatile than local fiat currencies. We saw the same flight to crypto when Venezuela’s economy crumbled under hyperinflation.
Bitcoin thrives when inflation ravages fiat currency
Inflation surged 50 percent in Argentina last year. That figure is expected to climb another 36 percent in 2019. As the tweet below explains, the Argentine peso lost 83 percent of its value against the dollar in the past year.
Currency against US Dollar, past year.
South Korea: -11%
South Africa: -15%
— The Spectator Index (@spectatorindex) May 22, 2019
To local communities, it has the effect of devaluing the money in their bank and forcing prices sky high.
In an attempt to store value, citizens of Argentina and other inflation-torn countries like Venezuela are turning to cryptocurrency to preserve their wealth. The “anti-inflationary” narrative of bitcoin has been touted for years. We’re finally seeing it play out in real time. As one Twitter user pointed out:
“If an Argentinian had bought Bitcoin at the highest point of the “biggest bubble in history”, in 2017, he would have been better off than leaving his money in his Argentinian bank account. So tell me again how Bitcoin is a horrible store of value.”
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