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In the landscape of cryptocurrency adoption, El Salvador stands witness to widespread awareness of Bitcoin; however, its practical utilization remains relatively modest, barring some exceptions seen in popular tourist destinations. On a parallel note, Argentina’s economy grapples with escalating inflation rates, a backdrop that amplifies the surge in Bitcoin adoption within the nation. This momentum is further bolstered by the emergence of a presidential candidate who openly supports and champions the cause of Bitcoin integration.
According to a note dispatched to investors by David Puell, a research associate at Ark Invest, Bitcoin adoption in El Salvador is trailing behind that observed in Argentina. Despite making waves by granting Bitcoin the status of legal tender in 2021, El Salvador’s actual adoption of the cryptocurrency presents a multifaceted scenario, as outlined by Puell.
Citing insights from Angela Dalton, CEO of Signum Growth Capital, shared during a recent Ark podcast, Puell emphasized the situation. Dalton’s observations from her visit to the Central American nation revealed a disparity: while awareness regarding Bitcoin is notably high, its practical utilization remains limited. However, Dalton remarked on the prevailing sentiment of pride among the population, as El Salvador proudly positions itself as an early embracer of innovative technologies.
Nonetheless, there are exceptions in the form of tourist destinations like Bitcoin Beach in El Zonte, where a broader acceptance of the digital currency is evident, Dalton further noted.
The Salvadoran population’s affinity for the U.S. dollar and the inherent price volatility of Bitcoin are the primary drivers behind this cautious stance, Puell argued. The adoption of the U.S. dollar as legal tender in 2001 has effectively shielded El Salvador from the inflationary challenges faced by neighboring countries, providing a foundation of stability and trust in its monetary system. Meanwhile, the value of Bitcoin has experienced a decline of over 20% since El Salvador’s endorsement of the cryptocurrency as legal tender, reversing its previous doubling within the same time frame.
Escalating Inflation and a Bitcoin-Friendly Presidential Candidate in Argentina
Conversely, the trajectory of Argentina’s association with Bitcoin is undergoing a rapid transformation, as outlined by Puell. This evolution is propelled by the nation’s formidable economic hurdles. With inflation projections looming at an alarming 147% for the year 2023, the citizens of Argentina are actively seeking alternative avenues to preserve their financial assets.
Within this economic context, the rise of Javier Milei, a libertarian presidential candidate openly supportive of Bitcoin, has taken center stage. Milei’s triumph in the summer primaries on August 13th not only foreshadowed a potential shift in Argentina’s economic policies but also ignited a substantial surge in Bitcoin’s valuation. The cryptocurrency’s worth catapulted by over 20%, reaching 10.2 million Argentine pesos within a mere 24 hours, as pointed out by Puell.
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