As the financial crisis makes life extremely difficult for those living in Argentina, people there are turning en masse to crypto as a hedge against bad public policies.
In 2020, the crypto ecosystem in Argentina grew, with a surprising influx of new users. According to figures shared by Maximiliano Hinz, Binance’s director of operations for Latin America to the Argentinean newspaper Telam, the number of new Argentinians operating in Binance is five times higher today than it was in 2019.
Binance Tripled its Use Base in Argentina
And although the exchange’s growth is outstanding, the Latin American team at Binance estimates that the number of new crypto users in Argentina has tripled in 2020 —if one considers all the service providers:
“From January to today, the number of Argentinean users in Binance has multiplied by five. But this was not the case in all platforms. If we talk about a market average, we could say that the number of users grew by 300% this year”.
Hinz notes that although the coronavirus outbreak played a crucial role in increasing Argentineans’ interest in the use and trading of cryptocurrency, the spark was already burning for some time. In particular, he assures that bad public policies have taken the country to a crisis level that is only surpassed by Venezuela’s, and Argentines -like Venezuelans- consider crypto as an excellent store of value.
In fact, despite the crisis, Hinz explains that Argentines have a particular preference for fixed-term investments in crypto. That is to say, to buy a specific digital asset, hodl it for a fixed time without the possibility of cashing out, and receive interest on the investment once the predefined waiting period expires.
Télam explains that one of the choices favored by Argentinian crypto investors is deposits with assured profitability of 6% per year in dollars, with deposit options from seven days to 90.
Paxful’s Numbers To The Moon
Another exchange with remarkable growth in Argentina was Paxful. The LocalBitcoins contender reported an explosion of more than 1,000% of newly registered users and a 450% increase in the volume operated in the country, according to figures shared by Magdiela Rivas, Paxful’s Latin American management consultant.
The reason is the same: the growing inflation and the difficulty in obtaining foreign currency to preserve value led people to seek decentralized solutions such as Bitcoin:
“Already since 2019 there was a growing interest of Argentineans to protect their savings against inflation and exchange restrictions. This increased as a result of the pandemic”.
These figures are good news for Paxful especially considering that it had to end its operations in Venezuela because the unilateral sanctions imposed by the U.S. government on Venezuela’s people made it impossible for them to serve such an important market.
Another crypto-related field that grew in 2020 was the fintech sector. According to the Inter-American Development Bank (IDB), the number of businesses prooviding solutions to compete against the traditional financial service providers grew over 100% throught the year.
Every crisis creates new oportunities, and Argentina can prove it.