Vorem has recently given out a report via Medium, and this report held some interesting statements. Argentina is in yet another financial crisis. As such, the amount of Bitcoin transactions within the country has seen a weekly volume of 101 million Argentine Pesos, or $1.4 million. This stands as a new high for the country at large.
Moving To Crypto Amid Economy Crash
According to the article, the citizens of Argentina have seen their currency consistently lose its value. As such, the people of Argentina seem to be going to Bitcoin to try and find a solution. Furthermore, the report highlighted that it’s getting challenging to transfer their fiat money to other countries, opting to use crypto instead.
Argentina has been seeing financial troubles ever since the start of 2018. However, these troubles had only increased after the COVID-19 pandemic crashed through the world, causing the economy to lockdown. As a result, the inflation rate is going higher and higher, all the while, the value of the Peso itself falls.
Lockdown Final Factor For Crash
Before the country started to enforce lockdown measures, the World Bank had already warned that Argentina is suffering a precarious balance in regards to its economic situation.
With the lockdown in tow, however, things have dropped down, crashed through the floor, and then kept nosediving. The Argentine Peso has managed to lose 68% of its value since it started in 2018. Couple this with an annual inflation of over 50%, and then a subsequent fall of GDP by 2.5% in 2018, things don’t look good. In 2019, the economy contracted a further 2.2%, with this year not looking any brighter.
Historical And Current Economy issues
The first quarter of 2020 alone has seen government data publish an economy regression of 4.8%, with unemployment shooting up a staggering 10% in the same period of time, as well. Vorem, in turn, has quoted “analysts” that predicted that Argentina’s economy would shrink a staggering 10% by the end of 2020.
Argentina has been consistently facing economic issues for some time now. This includes its insistence on using an overvalued currency, as well as continuing to take on large-scale loans. Further insult to injury comes from the lack of financial support by various multilateral institutions
It was back during 2001/2002 when the country went over to dollarize to restore confidence. Even so, the policy was abandoned in due course, going back to the Peso.