Bitcoin reportedly traded at an 8 percent premium to hit $12,300 on popular Argentinian Bitcoin exchange Buenbit. This comes shortly after current president Macri lost in a primary vote, hinting of potential re-election of the previous president, Cristina Fernandez. Traditional markets tumbled and, apparently, people turned to Bitcoin as a safe haven once again.
Bitcoin Surges to $12,300 In Argentina
The world’s largest cryptocurrency surged to as much as $12,300 on popular Bitcoin exchange Buenbit in Argentina. Comparably, Bitcoin currently trades at around $11,400 on other major exchanges, signaling an 8 percent premium.
Bitcoin is surging in Argentina, trading at ~$12,300 on @buenbit, a premium versus ~$11,400 on Coinbase, where it’s having a relatively quiet day. There’s a bloodbath in argie markets today after Macri lost in a primary vote and people fear the return of populism. (1/2) pic.twitter.com/EJdqATZn8L
— Camila Russo (@CamiRusso) August 12, 2019
Ex-Bloomberg reporter Camila Russo also notes that Argentines can currently buy US dollars freely, but some are still choosing Bitcoin as a store of value.
This, perhaps, doesn’t come much as a surprise. Amid the political and economic turmoil the country is torn by, inflation rates have hit 55.8 percent in June. Reportedly, this is the highest since 1992 and the peso is tumbling against the USD.
The most recent blow on Argentina’s economy came after the current pro-business president Mauricio Macri lost the preliminary presidential vote to his opponent, the former president Cristina Fernandez by a whopping 16 points. While president, Fernandez nationalized the country’s oil company Repsol’s stake in a local company YPF. She also took over the private pension system and she intervened in the economy with serious restrictions on exports and control over the currency.
All banks in the country were reportedly hit hard by the results of the vote. Moreover, Grupo Financiero Galicia, a well-known financial services company in Buenos Aires with a market cap upwards of $2.5 billion, plunged about 60%. Over 40% of the worth of energy company Transportadora de Gas del Sur was also wiped off.
Bitcoin As A Hedge: A Rising Trend
Amid the above mentioned political and economic turmoil, people have turned to Bitcoin, giving further merit to the notion that it can be used as a store of value and a hedge regardless of current local situations.
This also gives more grounds to the fact that Bitcoin represents an asset which is negatively correlated to the traditional financial markets and their problems, hence, being fit for use as a hedging instrument.
The fact that people in Argentina are even willing to buy it at a premium is sufficient enough. But it’s also not the only time Bitcoin has been used as a hedge.
Most recently, Cryptopotato reported that Bitcoin continues to perform well even as traditional markets continue to tumble amid growing trade tension between the US and China.