Bitcoin’s price has soared to new heights in Argentina following the victory of Bitcoin advocate and presidential candidate Javier Milei in the election primaries. This surge comes at a time when the value of Bitcoin and other cryptocurrencies has been struggling, making it particularly noteworthy. In response to Milei’s win, Bitcoin experienced a significant increase of 21%, rising from 8.4 million Argentine Pesos (ARS) to 10.2 million ARS in less than an hour on August 14th.
However, the rapid surge was short-lived, and Bitcoin’s price has since corrected, currently trading at 9.9 million ARS. Nonetheless, Bitcoin has shown remarkable growth against the Argentine Peso, with data from CoinGecko indicating a 210% rise since August 17 of the previous year.
This sudden price spike is attributed to the pro-Bitcoin stance of Javier Milei, who sees Bitcoin as a reaction by the people against what he calls the “central bank scammers.” Milei is also critical of fiat currency, arguing that it gives politicians the opportunity to exploit Argentines through inflation.
The appeal of Milei’s views is heightened due to the significant inflation challenges faced by Argentina, with rates currently at 116% and predictions suggesting it could rise to 142% or even 148.9%, according to the central bank’s estimate.
Milei secured a landslide victory in the primaries, winning 84% of the votes for his party, “La Libertad Avanza” (Freedom Advances). In the broader picture, he obtained 30.73% of the total votes, outperforming the “Unidos por la Patria” (United for the Homeland) coalition and the “Juntos por el Cambio” (Together for Change) party, which scored 26.84% and 28.14% respectively.
While Milei is a vocal supporter of Bitcoin, he does not propose making it legal tender like El Salvador did in 2021. Instead, he advocates for “dollarization,” suggesting that Argentina should adopt the US dollar as its primary currency.
It’s worth noting that Argentina and Brazil had previously planned to introduce a shared currency to strengthen economic ties and reduce reliance on the US dollar. This idea conflicts with Milei’s approach, should he become president after the upcoming elections in October.
In the past, Argentina’s central bank imposed restrictions on payment providers, prohibiting them from facilitating transactions involving unregulated crypto assets. This move was met with resistance from the Argentine Chamber of Fintech, which argued that such regulations impede progress and limit individuals’ options to safeguard their purchasing power in the face of rapid inflation. The Chamber emphasized the need for constructive dialogue and careful consideration of the impact on jobs, innovation, and knowledge exportation before imposing blanket bans on the crypto sector.