Recently, 21Shares explained the reasons behind the positive reception of Bitcoin towards the election of Javier Milei as president of Argentina.
Let’s see below all the details.
21Shares: Bitcoin celebrates Javier Milei’s election in Argentina
As anticipated, 21Shares, a company with offices in Zurich and New York that aims to revolutionize cryptocurrency investments by connecting the worlds of traditional finance (TradFi) and decentralized finance (DeFi), has recently provided a detailed analysis on why Bitcoin has welcomed the election of Javier Milei as president of Argentina.
First of all, it can be noticed that, since Bitcoin has been declared legal tender in El Salvador in 2021, the country’s GDP has grown by 20%. This data alone could influence Milei’s decisions, considering his role as the Argentine president.
Not by chance, Milei himself has emphasized that Bitcoin represents the return of money under private control, although he has not announced its legalization in Argentina.
However, significant investments in decentralized finance are likely to occur.
Furthermore, it is highlighted that Bitcoin, as a deflationary asset, adapts well to an economy with high inflation, such as Argentina, which has reached 140%, and stagnant growth.
However, since Milei has been elected only a few days ago, it is difficult to predict the effects and forecasts of his economic agenda. Therefore, it is essential to adopt a cautious approach to investments in this context of political change.
Milei: cryptocurrencies at the center of economic challenges
Recently, as anticipated, Javier Milei has been elected president of Argentina, a right-wing representative with an anarcho-capitalist vision.
His promise to put an end to recurring economic crises, increasing poverty, social tension, and triple-digit inflation has been well received.
In line with radical economic policies, Milei has emphasized that cryptocurrencies will be a key tool for the country’s economic recovery.
His victory, with over 14.4 million votes, surprised observers, considering the defeat of Sergio Massa, who had won the first round. Furthermore, Milei has become the first Argentine president not affiliated with any of the traditional parties.
His opinions on cryptocurrencies, distinct from those of his colleagues, date back to 2018, when he expressed his love for the idea behind cryptocurrencies, but stated that ‘sloppy politicians’ do not accept competition.
Anyway, Milei’s support for cryptocurrencies has remained constant over time, and the possible appointment of Diana Mondino as Minister of Foreign Affairs suggests a perspective of “free competition of currencies”.
This could lead to a new reality where millions of Argentine workers could be paid in Bitcoin, a concept that is gaining ground.
The potential future role of crypto in Argentina: Coinbase’s opinion and the growth of crypto companies
The prospect of an economic reform favorable to cryptocurrencies has been positively received by the crypto community at both local and international levels.
For example, the CEO of Coinbase, Brian Armstrong, praised Milei and invited the new president to discuss how to contribute to economic freedom for the Argentine people.
Furthermore, it is noted that Argentina, with an official exchange rate and a black market for the Argentine peso, is in a complex economic situation.
The strict capital controls prevent most Argentinians from accessing foreign currencies, such as the US dollar, to protect themselves from rapid inflation and devaluation.
Cryptocurrencies, like Bitcoin, have therefore become a safe haven for millions of Argentinians in this situation.
In addition, some cryptocurrency companies like Lemon Cash, Bitso, Satoshi Tango, and Ripio are thriving, responding to the growing demand for cryptocurrency-based financial services.
According to Chainalysis, Argentina leads the region with a raw transaction volume of 85.4 billion dollars, with approximately 5 out of 45 million Argentinians using cryptocurrencies in some way.
