Bitcoin price surged over $28,000 amid Argentina’s annual inflation rate surpassing 100%
Despite the peso’s weekly decline, Bitcoin price is up 83% yearly. In February, the annual inflation rate in Argentina exceeded 100%, reaching its highest level since the nation’s hyperinflationary phase in 1991.
Despite a 34% decline versus the US dollar over the same time period, Bitcoin has increased 20% in value relative to the Argentine Peso. At the time of writing, Bitcoin is changing hands at $28,064.
BTC/USD 4-hour chart | Source: TradingView
According to government statistics on Tuesday, the Consumer Price Index (CPI) rose by 6.6% in one month and by 13.1% overall.
By 2022, Argentina will have one of the world’s top ten highest inflation rates, nearly doubling from the 55.1% rate recorded in March last year. Although the nation’s central bank is tightening its control on associated services, the region also has a relatively high rate of cryptocurrency adoption, at number 13 on Chainalysis’s 2022 crypto adoption index.
The 2022 Global Crypto Adoption Index Top 20 | Source: Chainalysis
Argentina ranked third on that same rating, behind Nigeria and Turkey, both of which have alarming inflation that has only increased the popularity of cryptocurrencies. Bulls in Bitcoin frequently view the asset as a long-term inflation hedge because of the fixed supply.
Central banks that manage relatively stable currencies, such as the Bank of Canada, contend that due to Bitcoin’s relative volatility, it is not a hedge against inflation.
This week, the commodity soared 30% when the Federal Reserve poured $300 billion into loans to qualified banks, demonstrating how strongly Bitcoin responds to central bank policies. And if the situation persists in this way, BTC will gain momentum.
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