Alberto Fernandez has become the new President of Argentina, and he has named Martin Guzman as his Economic Minister. Guzman is apparently outspoken against the International Monetary Fund (IMF), and it is possible that he will recommend defaulting on debt payments for two years in order to restore debt sustainability.
If this were to happen Argentina’s credit rating would plummet, and the government would likely have a liquidity crisis due to a lack of willing creditors, which would then probably lead to out of control money printing. Argentina already has serious inflation problems, with the Argentine Peso (ARS) losing 37% of its value relative to the USD in the past year. A default on national debt obligations would rapidly accelerate the country’s descent into hyperinflation.
It is perhaps no surprise then that some Argentinians are choosing to dump their fiat for Bitcoin (BTC), since Bitcoin (BTC) can act as a safe haven against fiat hyperinflation.
Indeed, Localbitcoins in Argentina recorded a new all-time high of ARS 22 million in the past week, and in general trading volume in terms of ARS has been rapidly rising over the past several years as inflation has continued.
That being said, ARS 22 million is worth only about $375,000. Volume in terms of Bitcoin (BTC) has seen a slight uptick, from 15 Bitcoins (BTC) in late August to over 40 Bitcoins (BTC) currently, but relative to trading volumes in the rest of the crypto space these volumes are miniscule. Also, these Bitcoin (BTC) volumes are nowhere near the record highs for Argentina.
Regardless, even a small amount of Bitcoin (BTC) will be extremely valuable in Argentina in the near future, as it becomes harder for Argentinians to purchase Bitcoin (BTC) due to their purchasing power plummeting.