One of the new Argentine president’s first major actions is to drastically devalue the local currency to combat the economic crisis. Meanwhile, the price of Bitcoin in Argentina is cooling, having hit an all-time high a few days ago.
On December 12, newly elected President Javier Millay announced a sharp devaluation of the Argentine currency (ARS), along with cuts to energy and transportation subsidies.
Peso devalued by 50%
The move will cause the Argentine peso to fall by 50%, from 400 pesos per dollar to 800 pesos per US dollar.
“For months we will be worse off than before,” Economy Minister Luis Caputo said. He added that Argentina is “addicted” to fiscal deficits. Meanwhile, Milei said the country does not have time to consider other alternatives.
According to the report, Argentina is experiencing 143% annual inflation, its currency has plummeted and four in 10 Argentines live in poverty. Additionally, Argentina has had an average annual inflation rate of 40% over the past decade.
Moreover, the move comes two months after Argentina’s central bank raised interest rates to a record 133%.
Read more: 7 Ways to Handle Retirement When Inflation Rises
Mailay, a self-described “anarcho-capitalist,” won the presidential election in November. The move was celebrated by the cryptocurrency community as he supports Bitcoin and is also anti-central bank.
Tahini’s, a Canadian restaurant chain famous for Bitcoin, posted six comparison charts. This specifies how Bitcoin is visible to citizens of Turkey, Egypt, Nigeria, Argentina, Lebanon, and Pakistan.
“The total population is 725 million. “Try to convince them that Bitcoin is not useful.”
Bitcoin at its peak in Argentina
In Argentina, you can buy Bitcoin for less than 15 million pesos. The asset reached an all-time high on December 9, surpassing ARS 16 million against the local currency.
A massive devaluation of the currency will make this mismatch even worse.
For the rest of the world, BTC spot prices are down 2% at $40,880 at the time of writing.
The much-anticipated market correction is gathering pace, with the asset losing 8% since its 2023 high of $44,380 over the weekend.
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