One of the first major moves for the new Argentinian President is to substantially devalue the local currency in a bid to deal with an economic emergency. Meanwhile, Bitcoin prices in Argentina are cooling from a new all-time high a few days ago.
On Dec. 12, newly elected President Javier Milei announced a sharp devaluation of the Argentinian currency (ARS) alongside cuts to energy and transportation subsidies.
50% Devaluation in Peso
The move will devalue the Argentine peso by 50% to 800 to the US dollar from 400 pesos to the dollar.
Economy Minister Luis Caputo said, “For a few months, we’re going to be worse than before.” He added that Argentina has an “addiction” to fiscal deficits. Meanwhile, Milei has said the country didn’t have time to consider other alternatives.
Argentina is suffering 143% annual inflation, its currency has plunged in value, and four in ten Argentines are impoverished, according to reports. Additionally, Argentina has averaged a 40% inflation rate per year over the last ten years.
Moreover, the move comes two months after Argentina’s central bank raised rates to a record 133%.
Read more: 7 Ways To Handle Retirement With Increasing Inflation
Milei, a self-declared “anarcho-capitalist”, won the Presidential election race in November. The move was celebrated among the crypto community since he is also pro-Bitcoin and anti-central bank.
Canadian restaurant chain Tahini’s, which is big on Bitcoin, posted six comparison charts. It stated this is what Bitcoin looks like for the citizens of Turkey, Egypt, Nigeria, Argentina, Lebanon, and Pakistan.
“A combined population of 725 MILLION people. Try to convince them Bitcoin is not useful.”
Bitcoin in Argentina at a Peak
A Bitcoin in Argentina can be bought for just under 15 million pesos. The asset hit an all-time high against the local currency on Dec. 9 topping 16 million ARS.
With the massive devaluation of the currency, this discrepancy is only going to be exacerbated.
For the rest of the world, BTC spot prices had declined on the day by 2% to trade at $40,880 at the time of writing.
The market correction that many predicted is gathering pace with the asset losing 8% since its 2023 high of $44,380 over the weekend.
