Whenever a big fat whale on Wall Street says that Bitcoin could be a bubble, it makes me want to write about why I “hodl” my bitcoin.
I could teach monetary theory and describe the characteristics of a currency and compare them to Bitcoin, or I could talk about the Bitcoin supply shortage curve, or another myriad of reasons why Bitcoin will succeed in the long run . Today, however, I would like to talk about adoption.
A look at South America will help you understand why Bitcoin has become such a phenomenon.
In my last article, I gave small examples of what has already happened in Brazil in monetary terms and how it influenced my perception of the value of Bitcoin. Today, I want to move to Argentina and explain the reasons for the adoption of Bitcoin by this country.
Populist governments do not know mathematics. after a while, money runs out and it becomes necessary to use “creativity” in their accounting. It is not by chance that there are at least two recent economic facts that have had an impact on the Argentineans and made them aware of the value of a deflationary currency.
The first was the “Corralito”, in 2001, when the government froze all the money on bank accounts for a whole year, allowing only extremely limited withdrawals for household necessities.
In 2011, exactly 10 years later, the exchange control “cepo” set up by former President Cristina Kirchner was created. This movement led the country to relaunch the symbols of hyperinflation from the 1980s, as the figure of “arbolitos” – money changers stopped (like trees) at the corners of tourist places – and stores “cuevas” At the black market exchange for those who wanted to sell dollars at a much better price than in the official government exchange rate, basically the market was paying double.
Only two years after the emergence of Bitcoin, the Argentineans felt betrayed by their own national currency, suffering from highly manipulated exchange rates. Those who suffer the effects of such a monetary policy are likely to look favorably on a new deflationary currency, like Bitcoin. Argentina is ahead of many South American countries in terms of adoption; their crisis began in 2011, while Brazil only started in 2014.
The Wall Street bankers, with their $ 1 million bonuses, may not understand or understand Bitcoin, because they make noble proclamations of their penthouses in Manhattan. But for ordinary people suffering in crippling economic conditions, Bitcoin could literally keep them alive while their national currency falls like a stone.