Argentina Headed to Bankruptcy – Could Bitcoin Save It?

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In the wake of the COVID-19 pandemic, many countries around the world are facing recession. Those who aren’t are still suffering from serious economic problems. It will get worse in the coming months as the first wave of the virus completely cools down. Besides killing hundreds of thousands of people, COVID-19 will have a long-lasting impact on the world economy.

One of the first countries that is very close to bankruptcy is Argentina. The South American country is expected to announce defaulting on its debt pretty soon. It will be the 9^th sovereign debt default in its history and one that could have serious consequences on the country’s future. However, with crypto transactions soaring ahead of the crisis, could Bitcoin be its saver?

More and More Citizens Buying Bitcoin

In the past few months, Argentinians are stockpiling Bitcoins amidst the worst financial crisis in the country. The coronavirus made things even worse, and according to latest reports, Argentina is ready to consider its 9^th sovereign debt default. The country has rejected offers from groups of creditors, rejecting the idea of scenarios that could lead to even more debt.

Bitcoin transactions in the South American country have soared in the past few weeks. This signals a change in the mindset of Argentinians. It’s becoming clear that banks are not to be trusted anymore. People are buying Bitcoins and stockpiling them for when the situation hits rock bottom. With the Argentine Peso’s value dropping quickly, Bitcoin becomes a very attractive idea.

Not that the government is interested. Most politicians are strongly and unrightfully opposed to Bitcoin when it could be just what countries like Argentina need right now. With inflation closing in on 50%, investing in Bitcoin is a good idea.

It could open up plenty of industries such as Bitcoin gambling which could help Argentina repay its debts on its own. No need for creditors, no need for loans, no need for restructuring. It will still take some time before the massive debt is paid off, but at least there’ll be a steady income without banks as an intermediary.

Right now, it’s a far-fetched idea. However, with more and more Argentines buying Bitcoin, politicians may consider it a viable option in the future.

Huge Spikes in Weekly Bitcoin Volume Bought

Data from Arcane Research shows that the weekly volume of Bitcoin bought with Pesos in the last week of April was up over 1,000%. That’s a huge volume of Bitcoins purchased and a sign that the citizens are already rejecting the country’s currency.

In 2001’s debt default, the country turned on the Peso in order to restructure its debt and citizens lost over 70% value of their bank deposits overnight. With the country heading for another bankruptcy, many are fearing such a scenario again. And how can this be avoided? By purchasing Bitcoins, of course.

This should be a lesson to Argentina and other countries around the world. Decentralized digital currencies can be the future. With a global economic crisis looming in the wake of the COVID-19 pandemic, Bitcoin could prove to be key for economic recovery.