Uday Kotak highlights Bitcoin's demand as Argentina battles 276% inflation
Argentina has been embroiled in an economic crisis with inflation touching 276%. Commenting on the South American nation's economic woes, Uday Kotak, founder of Kotak Mahindra Bank, said it is natural for citizens to use Bitcoin as a hedge. "When countries manage macro badly, savers move to protect value of their savings. Traditionally it was gold. Now Bitcoin too!," he said. "While I am not convinced about Bitcoin, would it not be better than the Argentinian peso with 276% inflation?"
Bitcoin purchases soar in Argentina amid economic turmoil
Bitcoin transactions in Argentina have rocketed to nearly 20-month highs. The week ending March 10 recorded close to 35,000 Bitcoin transactions, double the average weekly volume from the previous year. The increase was fueled by Argentines' desire to safeguard their wealth amid a recession and skyrocketing inflation under President Javier Milei's 'shock therapy' economic strategy. Since January, the peso has gained 10% against the US dollar whereas Bitcoin has gained 60% against the greenback.
Bitcoin's record-breaking run and domino effect on other tokens
Bitcoin has achieved a new record high, breaking past the $73,000 mark. The rise occurs despite slightly heightened US inflation, with investors confident that this will not impede expected interest rate cuts by mid-year. The UK's decision to permit certain Bitcoin-linked securities on its stock market also contributed to this surge, further validating it as an asset class. The rise of Bitcoin has triggered a domino effect on other cryptocurrencies, with Ethereum, BNB, Dogecoin recording significant gains in few weeks.
Global impact and future prospects of Bitcoin
Several macroeconomic developments have been credited for Bitcoin's record high, including the introduction of Bitcoin ETFs and increased accessibility. Raj Karkara, COO of ZebPay, expressed optimism about Bitcoin and the overall crypto market's positive growth trajectory in 2024. The forthcoming Bitcoin halving event, which cuts the block reward by half, is also anticipated to create supply pressure and potentially drive further price increases.
