El Salvador is the first country to adopt bitcoin as legal tender. A historic political choice whose economic fallout has so far been mixed. This is not the case with Argentina. Without having made bitcoin its legal tender, the country is seeing the adoption of the asset strengthen. This, even as the two countries are facing deep economic difficulties.
In short :
• Argentina has one of the highest inflation rates in the world.
• The situation favors the mass adoption of the flagship cryptocurrency in the country.
• Ark Invest notes that Argentina now overtakes El Salvador in bitcoin adoption.
Bitcoin adoption in El Salvador plummeting?
Bitcoin adoption is moving at different paces in El Salvador and Argentina. According to recent data provided by Cathie Wood’s Ark Invest, the latter tends to overtake El Salvador. A dynamic that several reasons explain.
Most of this trend is explained by the effect of economic factors. Indeed, the adoption of the queen of cryptos is declining in El Salvador in particular. This is because it does not reach the level of enthusiasm that legal tender status was supposed to give it.
The consequence is that the monetary use of bitcoin remains relatively low, despite the extensive public awareness campaign. A general trend which despite everything does not concern tourist hotspots such as Bitcoin Beach. Here, bitcoin has particularly gained popularity despite its volatility.
Another element allows Ark Invest experts to confirm the low adoption of bitcoin in El Salvador. This element is the US dollar, which was legal tender in El Salvador in 2001. Ark Invest notes that in truth, there is still a clear preference for this currency in El Salvador.
It also seems that this has ensured the country a certain economic stability. This, in a particularly inflationary context affecting its neighbors Guatemala and Honduras. What bitcoin has yet to do in El Salvador.
Increased enthusiasm for bitcoin in Argentina
The miracles that the flagship crypto fails to accomplish in El Salvador, it seems to succeed in Argentina. According to Ark Invest, the country is experiencing a faster pace of bitcoin adoption. These are economic factors that help it.
Indeed, Argentina is experiencing one of the highest inflation rates in the world. According to projections, this should approach 150% in 2023. This difficult economic context has prompted citizens to explore other means of preserving their wealth.
This is how they set their sights on bitcoin deemed relevant in terms of a store of value. And according to experts, this craze could only be in its infancy. Interest in the asset could particularly strengthen if Javier Milei wins the presidential elections. Bitcoin prices increased by more than 20% during the victory of this pro-bitcoin libertarian candidate in the primaries.
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