With the local economy continuing to suffer and the devaluation of the Argentine peso, more than 73% of the participants in a recent poll voted that cryptocurrencies are the most efficient savings mechanism. Almost the same amount responded that they had invested in at least one digital asset.
Argentina's economy after the COVID-19 blockades
The South American country had been suffering even before the government initiated extreme measures in an attempt to combat the growing threat of the COVID-19 pandemic. Argentina was one of the first nations in the region to introduce nationwide lockdowns, leading to an initial decline in the number of infected.
However, as time passed, the number of confirmed COVID-19 cases grew, but the country's economy only got worse. April 2020 showed a 26.4% drop compared to the same month last year in gross GDP. Even in May, when strict measures were relaxed, the percentage dropped by 20.6.
A report by the Municipal Bank Foundation exemplified the real magnitude of the pain of citizens, since it estimated that for each point of drop in GDP, there is a point and a half reduction in formal wages.
However, earlier this week, the country got a breath of fresh air by successfully restructuring almost all of its $ 65 billion debt with private creditors. Argentina's Economy Minister Martín Guzmán announced that 99% of creditors accepted the offer to extend debt maturities and reduce interest rate payments from an average of 7% to around 3%.
President Alberto Fernández hoped that "we will never enter this labyrinth (of indebtedness) again" and pointed out that in 2030 Argentina will owe $ 38 billion less than in 2019.
Local economy pushes people towards cryptocurrencies
Despite the recent positive news, it appears that Argentines are already looking for a solution outside of the traditional financial space, according to the survey by popular peer-to-peer cryptocurrency exchange Paxful.
It reads that of 1,113 participants surveyed, 73.4% (or 817 people) voted that "cryptocurrencies are the most effective way to save and protect your funds." Their responses also indicated that Argentines tend to stay away from the local currency, as the Argentine peso has lost nearly 90% of its value against the US dollar in the last five years alone.
70% of those surveyed added that they had invested at least once in a digital asset, citing as the main reason "the ability to provide an economic refuge from the depreciation of the local currency due to inflation."
When asked about their perception of Bitcoin in particular, voters responded that they had bought BTC after assessing its global potential and pointed to its decentralized nature as a significant merit. 49% said the asset could provide greater security within an otherwise tumultuous banking system.
Paxful's Latin American manager, Magdiela Rivas, highlighted the growing demand from Argentines for cryptocurrencies. The exchange marked a 37.5% increase in volume since the beginning of 2020 and even more after the COVID-19 lockdowns.
Another P2P digital asset exchange, namely LocalBitcoins, has seen an increase in Bitcoin trading volume from Argentines. According to data from coin.dance, BTC P2P volume reached a new all-time high in early August after continuously expanding for weeks.