“When countries manage macro badly, savers move to protect the value of their savings. Traditionally it was gold. Now bitcoin too! While I am not convinced about bitcoin, would it not be better than the Argentinian peso with 276% inflation?,” Kotak said on X.
Argentina is currently experiencing one of the highest annual inflation rates in the world at 276%. A Bloomberg report indicates that Argentinians are increasingly adopting Bitcoin as an alternative to the US dollar amid the falling value of the peso. This trend underlines a broader shift away from traditional safe havens such as the dollar.
According to Bloomberg, Bitcoin purchases in Argentina soared to nearly 20-month highs on the local cryptocurrency exchange Lemon. Lemon reported nearly 35,000 Bitcoin purchases in the week ending March 10, doubling the average weekly volume from last year.
The rise in Bitcoin adoption is gaining momentum among Argentines as they look to protect their wealth amid a recession and rising inflation, further fueled by President Javier Milei’s implementation of shock therapy policies aimed at resetting the economy. Exchanging pesos for dollars, the traditional main safe haven, has become less attractive. Over the past two months, the black-market exchange rate for the peso has strengthened 10% against the dollar, while Bitcoin has gained nearly 60% against the greenback, as per Bloomberg.
Earlier last week, Uday Kotak also stated that with a rebound in the cryptocurrency market and Bitcoin hitting record highs, the future competition for equity markets could be coming from the digital currency.”Capital formation in India has a lot to do with development and regulation of local markets. Having seen a revolution in local markets from badla systems to futures and options (F&O), the future competition could be in the form of cryptos,” said the veteran banker.Kotak further noted that developed nations legitimising the virtual currency and its trading further adds fuel to the crypto bandwagon and investors are looking at it as a hedge for other investments.
After enduring months of turbulence, Bitcoin, the world’s largest cryptocurrency, has recently gained significant momentum, surging to an all-time peak above $73,500. However, this week, Bitcoin has experienced a correction and dropped to the $61,000 level in today’s trading session.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
