Did you know in Argentina, many restaurants don’t even print out their menus?
The reason is, the prices of the items change every month. Sometimes every week.
That’s how bad inflation is there.
Currently over 100%.
That means prices double every year.
Or a better way to put it, as I explained in this blog post, the Argentine peso loses half its value every year.
The situation is so bad that when Argentinians get paid, they convert their paycheck to USD almost immediately.
Otherwise, their paycheck of 100,000 pesos will basically become 50,000 pesos in twelve months.
However, changing your money into USD isn’t easy. In Argentina the forex market is controlled heavily by the government, USD supply is limited, and through official channels, the exchange rate isn’t a fair rate.
Therefore, almost all Argentinians exchange their pesos to USD on the black market (which is thriving).
But over the last few years, Argentinians have learned there is a better way for them to hedge against inflation.
It’s no surprise that Argentina is one of the fastest-growing Bitcoin markets in the world.
After all – this is exactly what Bitcoin was built for.
I’ve explained this before. There is no inflation for people that save in Bitcoin.
It can be hard to get your head around this, but here’s a tidbit that might give you some perspective:
Right now, Bitcoin is trading at all-time highs in Argentina.
You might be thinking, how? Isn’t Bitcoin in a bear market? It was $68,000 USD last year, and now it’s $30,000?
Yes, but that’s Bitcoin in USD.
Remember, Bitcoin is a global asset, traded in every currency.
All fiat currencies get weaker over time, as all of them have an unlimited supply, so get less scarce every year.
However, some are more inflationary than others.
Here is the chart for Bitcoin against the NZD:
And here is the chart for Bitcoin against the Argentine peso:
An easier way think of it might be:
Last year, a can of Coke was probably 200 Argentine pesos, and maybe $3 NZD.
This year, a can of Coke has doubled to 400 Argentine pesos, but probably only gone up ~15% to $3.50 NZD.
It’s the same for everything in Argentina, including Bitcoin.
Because Argentine pesos are losing value so quickly, the Bitcoin price in Argentine pesos keeps rising much faster than in other countries.
This is why it can be hard for New Zealanders to wrap their heads around Bitcoin.
Because in New Zealand, the use-case is not as obvious as it is in countries like Argentina, Turkey, Lebanon, Zimbabwe, Venezuela and Pakistan.
But it will be.
As long as the money printer stays on, the purchasing power of the NZD will trend towards zero.
Perhaps not as fast as it does in other countries, but the direction is the same for them all.
Want to get started in Bitcoin? Check out my free guide to buying your first $100 in Bitcoin in NZ.