Argentinians Turn to Bitcoin as Inflation Skyrockets: One Bitcoin Trades at $35,000 Premium

In Argentina, the fight against soaring inflation has taken an unexpected turn as more and more people are turning to Bitcoin as a safe haven. The price of one Bitcoin in Argentina is now a staggering $35,000 higher than anywhere else in the world, according to data from two of the country's largest crypto exchanges.

Ripio, which boasts 4.5 million users, reports that the current purchase price of Bitcoin is 13,800,000 Argentine Pesos (ARS). The sell price has an even larger difference of one million ARS, equivalent to $5,000, at 12.8 million ARS. Buenbit, a close competitor, claims that one Bitcoin can be purchased for ARS 13,738,800.00, or $62,000. This is in stark contrast to the global price of Bitcoin, which is currently around $27,000.

The staggering premium on Bitcoin in Argentina is the highest ever observed in dollar amounts. To validate this, we spoke with Argentinian crypto enthusiasts who confirmed that one Bitcoin is indeed trading at approximately 14 million ARS.

The reason behind this massive premium lies in the official exchange rate between the US dollar (USD) and the Argentine Peso (ARS), which is not reflective of the market rate. The official rate, known as Dólar Banco Nacional (Dólar BNA), is only available to officials and is set at half the current market rate, which is 483,000 ARS per USD, or what the locals call "Dólar blue."

In fact, the tokenized dollar, such as USDt or USDc, is even more expensive than the market rate, trading at 502 ARS per token according to Buenbit. This is likely due to the ease of transferring digital tokens compared to physical cash or bank dollars in a country with strict capital controls.

Argentina has imposed strict limits on the purchase of USD, allowing individuals to purchase only $200 worth of USD and requiring permission to transfer it outside the country. Similarly, businesses need authorization from the Central Bank of Argentina to access foreign exchange markets. This has led to an increasing demand for Bitcoin, which offers a way to circumvent these restrictions and provides a viable alternative to the rapidly depreciating local currency.

Argentina has been grappling with galloping inflation, with an estimated monthly rate of 8% or an annual rate of 104%. The country's M2 money supply, which includes cash and bank deposits, has doubled in the past year alone. Despite the central bank's efforts to raise interest rates to 81% in a bid to curb inflation, the situation shows no signs of improving, let alone resolving.

Bitcoin has emerged as a popular choice for Argentinians as it not only acts as a hedge against inflation but also serves as a conduit for accessing US dollars in a country with strict capital controls. Despite Bitcoin's recent price volatility, with a decline of over 50% since November 2021, it has reached all-time highs in Argentina, particularly in the official exchange rate.

In fact, the market rate for Bitcoin in Argentina is more than double the all-time high in the official rate, with Coingecko showing no market activity in the official rate due to limited accessibility. This highlights the increasing adoption of Bitcoin as a store of value and means of exchange in Argentina, where traditional financial systems are struggling to keep up with the economic challenges.

While the exact extent of Bitcoin adoption in Argentina is difficult to determine as exchanges do not publish trading volumes, it is clear that crypto is playing a crucial role in the country's economic landscape. As the Argentinian government takes a relatively accommodative stance towards Bitcoin regulation