The growing inflation and the uncertainty of the exchange rate as constants in the Argentine economic scenario mean that those who invest in cryptocurrencies give priority to the coverage of their capital, before the potential profits of cryptocurrencies and turn to “stable coins” or the famous “crypto dollar”.
The data comes from a report prepared by the platform Bitso who carried out an analysis of the crypto ecosystem across the region and found that, unlike what happens in other countries, where bitcoin is the most chosen currency by users; Argentines prefer the crypto-dollar.
The Bitso study shows that, at a regional level, 38% of the cryptocurrencies acquired in the second half of 2023 correspond to bitcoins and 30% to digital dollars. However, In Argentina, bitcoin purchases reach just 13% of transactions; while 60% correspond to stable currencies.
“High inflation rates create an incentive for consumers to search safe and fast options to protect your money from devaluation. For this reason, Argentina is the only country where Bitso operates The purchase of crypto-dollars is almost five times that of bitcoin”explained Julián Colombo, General Director of Bitso Argentina, during the presentation of the report.
The search for “cover” by the Argentines is reflected in other behaviors: “We noticed it In the first week of the month the average volume traded is 10% more, with the digital dollar always in first place. This behavior coincides with the salary collectionto protect income from devaluation,” Colombo said.
Although bitcoin is also the main component of the average portfolio in Argentina, contributing 48% of total holdings, the second most important is the crypto-dollar (stablecoins USD and USDT) which represents 26% on average. Third place is occupied by ether (ETH), with 14%.
“This trend of overrepresentation of stable currencies is shared by Colombia, even with some instability in exchange rates. However, Mexico and Brazil, with much more stable macroeconomic indicators, show a different landscape, where stablecoins represent a single-digit figure and the holding of local currency in the portfolio is higher. This way, Argentina is not only the country where the majority of crypto-dollars in the entire region are purchased, It is also where their mandate is by far the highest,” Colombo underlined.
On the other hand, data analyzed from over 8 million Bitso users suggests that large cryptocurrency holders will remain for the long term, which shows widespread confidence in the market recovery after the difficulties of the cryptocurrency sector at the end of 2022 and the beginning of 2023 and the expectations for a new and long-awaited “summer of cryptocurrencies”.
Crypto user profile
The report also identifies the user profile in Latin America, detailing data such as gender, age and geographic location, and highlights that in Argentina Bitso customers grew 16% year-on-year in the second half of the year and already exceed one and a half million.
With respect to gender, an interannual growth of 3 percentage points is observed women which handled cryptocurrencies in the second half of the year. However, their participation is even lower than that of men, barely reaching the 27% of total users in the region.
The report also highlights that women tend to join the cryptocurrency world an older age. “Women feel more confident in acquiring cryptocurrencies with age, which may be related to the late financial independence and stability they usually face in the region, unlike men,” according to the report.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.