News

Why many people in Argentina continue to bet on cryptocurrencies


BUENOS AIRES – Romina Sejas’ entry into the crypto world – in a country where digital currencies have gained popularity despite their volatility – started with pizza.

Several years ago, she was helping prepare pizza dough at a friend’s house outside Mendoza, a small city in western Argentina. The friend suggested brewing the dough in his beak. “I was very confused,” Ms. Sejas said. “I think mines involve men wearing helmets and pickaxes.”

Instead, he opened a door into a room where shelves were stacked with spinning computers. Called miners in technological jargon, the computers work non-stop, verifying cryptocurrency transactions and rewarding their owners with digital currency. They consume so much energy that the room is a functional oven.

Her friend Sejas – who mines ether, one of the world’s most popular cryptocurrencies – explained that participating in crypto has increased his monthly salary by almost 40%, from 800 dollars doing odd jobs to $1,100.

Ms. Sejas quickly became a crypto converter, joining the wave of Argentines turning to cryptocurrencies as a way to earn more, increase their savings and even conduct business every day. day.

Although the cryptocurrency market has been shut down in recent months, many Argentinians see it as a safe haven in a country where rising inflation and a severe economic crisis have affected their currencies. national currency, pesos and people’s bank accounts.

“The money here is like ice cream,” said Marcos Buscaglia, an economist in the capital Buenos Aires. “If you hold a peso for too long, the peso will melt into how much you can buy with it.”

Because very few Argentines trust the peso, they prefer to save in other currencies, including dollars.

About a third of Argentinians believe that savings held in pesos in a local bank will hold their value within two years, the lowest percentage among respondents in the country. 15 countries surveyed in June by Morning Consult, a data firm based in Washington.

Nearly 60% of Argentines believe Bitcoin, one of the most popular cryptocurrencies, will retain the value of their savings over the same time period, the survey said.

With inflation expected to hit 90% in December, the value of the peso continues to fall, pushing up prices for everyday products, from toilet paper to tuna, and making it virtually impossible to save.

Ongoing global supply chain challenges and the war in Ukraine have contributed to prices, but many economists blame Argentina’s disaster on years of government overspending. Since the government doesn’t collect enough revenue to cover the shortfall, the central bank prints pesos – pushing inflation even higher.

Now, many Argentinians are turning to crypto as a way to get out of the peso. About a third of Argentines say they buy or sell crypto at least once a month, double the percentage of people in the United States, according to a separate survey by Morning Consult.

But cryptocurrency, with its instability, also carries risks.

Vicente Cappelletti, 26, said he lost about $1,000, about 10% of his savings, when TerraUSD, a cryptocurrency known as stablecoins — a cryptocurrency that can be pegged to other currencies. government currency like the dollar – fall in the May.

Mr. Cappelletti, an industrial engineer, said it was easy to lose money “if you don’t pay attention to the matter regularly and don’t have a lot of information”. He sold all his savings in crypto for pesos and put them into a traditional investment fund.

Pablo Sabatella, who runs an organization in Buenos Aires that offers crypto classes, said that hundreds of people contacted him in the days after TerraUSD exploded, desperate for a recovery. their money.

“Most people don’t understand what they’re doing,” he said.

The value of Bitcoin has dropped from $65,000 last November to around $24,000 today, almost double the peso’s drop. But many Argentinians believe the cryptocurrency will recover – unlike the peso.

However, for some, cryptocurrencies have brought welcome financial benefits.

Ms. Sejas, who worked as a waitress and telemarketer, makes a living as a crypto consultant and by teaching cryptocurrency seminars. She runs an online market with 7,000 members can use crypto to buy almost anything – from hiking boots to housing.

Ms. Sejas grew up in a working-class family without internet. Her parents didn’t finish middle school or don’t have a bank account. “My family often measures the length of the toilet roll we have, because we have very little,” she says.

The money she made in crypto changed her life. “I am studying law at a private university,” she said. “I’ve done all the health checks that I never had when I was growing up‌.”

Around the world, people in low-income and emerging countries have become the largest users of cryptocurrencies, according to various reports, surpassing the United States and Europe.

Digital currencies are appreciated in countries where domestic currencies are volatile and where governments have made it more difficult for people to buy foreign currency.

Two poor countries, El Salvador and the Central African Republic, have even accepted Bitcoin as another official national currency – although bets have not paid in full in El Salvador, and so is it Soon to indicate whether it did so in the Central African Republic.

Argentina offers some clues as to the appeal of cryptocurrencies.

Argentines have long viewed the dollar as a safe haven. Daniel Convertini, 34, who works in communications for a ride-hailing company. “I learned how to do it from my father and grandfather, not because I read it in some financial newspaper.”

Gian Maria Milesi-Ferretti, an economist at the Brookings Institution, said Argentines are believed to hold more dollars in cash or in foreign financial institutions than almost anyone else – apart from Americans.

But three years ago, the Argentine government made it more difficult to buy American currency. Argentinians can only legally buy $200 a month and pay huge taxes on every transaction.

Instead, many turned to the black market for dollars, and the streets of downtown Buenos Aires were filled with money changers, who whispered their conversion rates to passers-by. Street.

But digital currencies offer an advantage by not requiring people to ship large warehouses of bills.

“We came up with a way around controlling the currency by selling dollars,” said Julián Fraiese, founder of Buenbit, an Argentinian crypto exchange focused on dollar-pegged stablecoins. la electronic money. The company said it added 200,000 users in seven months after government controls on the dollar were tightened in 2019.

Ismael Loyo, 34, a taxi driver who moved to Argentina from Venezuela in 2018, switched to crypto after seeing the peso depreciate rapidly, echoing what he experienced back home. Immediately after being paid, he logged into an online exchange and purchased cryptocurrency.

Aware of the uncertainties of the digital currency market, he explained that he is moving out of a currency that “just depreciates” and into one that, even though it is volatile, “ maintain its value in the long term and go up. “

For the likes of Loyo, who has lived in two countries affected by high inflation, Bitcoin seems less speculative than a necessity. “Perhaps if I lived in another country, I would never have to learn about all this,” he said.

However, the cryptocurrency’s falling value has come at a cost, and concerns about its risks have led to tighter regulatory scrutiny.

Buenbit recently Fired almost half of its employees, and days after two Argentine banks began offering customers the option to buy and sell cryptocurrencies, the country’s central bank forbidden those services.

But since many Argentinians have little trust in the government’s management of the economy, the cryptocurrency, despite its turmoil, remains in high demand.

According to Deel, a payroll company employed by more than 100,000 workers in 150 countries, more workers are in Argentina than in any other country, including many freelancers in jobs like developers Software developers and translators, opting to receive part of their salary in cryptocurrency.

“Technology is the language of the world to come,” Rev. Fabián Báez, a priest who helps organize technology classes in Buenos Aires, said that includes teaching students how to open a digital wallet to start collecting cryptocurrency.

In Buenos Aires, signs on public buses attract people with the promise of high returns from stablecoins. Inside a crowded subway station, an advertisement proclaims: “Beat inflation. Buy Bitcoins. “

“I would rather expose myself to the risks of cryptocurrencies than to the risks of the Argentine government,” said Convertini, a cab driver.



Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button