Argentina’s controversial new president Javier Milei has begun his shock therapy for the Argentine economy. These include significant budget cuts and the devaluation of the Argentine peso. Meanwhile, Bitcoin (BTC) recently rose to a record price due to the economic turmoil in the country.
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Government and Regulation
Argentina is struggling with inflation
In addition to the devaluation, Finance Minister Luis Caputo also announced significant cuts in government spending. These measures include reducing fuel and transport subsidies. Caputo stressed that he inherited the worst economic legacy in Argentina’s history.
According to Milei, Argentina is undergoing real shock therapy with the new measures. Things won’t suddenly be all rosy and sunny for the country’s residents, says Caputo: “We’ll be in a worse situation for a few more months, especially when it comes to inflation.”
Argentina has long struggled with rising inflation, with prices rising by around 150% last year. Argentina also suffers from high levels of public debt and reports indicate that 40% of the population lives below the poverty line.
Bitcoin reaches record price
One of the consequences of the economic turmoil in the country is a rising Bitcoin price against the Argentine peso. The value has increased significantly since 2020 and a few days ago the Bitcoin Peso rate reached a new price record.
Bitcoin’s rise could be a sign of growing confidence in cryptocurrencies as an alternative to traditional currencies, especially during times of economic turmoil. The devaluation of the peso and the general crisis in the country may have strengthened Bitcoin’s position as a potentially safer investment.
The same effect would also be observed in other countries where inflation is enormous. In a tweet, Tahini’s shows the Bitcoin rates against the local currency in Turkey, Egypt, Nigeria, Argentina, Lebanon and Pakistan:
That’s what #Bitcoin This is the situation for the citizens of Turkey, Egypt, Nigeria, Argentina, Lebanon and Pakistan.
A total population of
725 MILLION people
Try to convince them that Bitcoin is not useful. Good luck š pic.twitter.com/z8poh2C7Wbā Tahinis (@TheRealTahinis) December 13, 2023
Although it is known that the new Argentine President Milei is a Bitcoin fan, this is not yet reflected in the country’s official policy. For example, El Salvador has decided to adopt Bitcoin as legal tender. However, this is not yet the case in Argentina.
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