Argentina’s love affair with Bitcoin

1} Argentina’s economy and the 46 million citizens have had a tough run for the last few years.

Inflation is nearly 140% year-over-year. More than 40% of the country is living in poverty. Farmers experienced the worst drought in over 60 years a few months ago. To put these challenges in perspective, Argentina’s per capita GDP has barely doubled in over 100 years.

And with all this economic fiasco going on, what happened in Argentina last week was very interesting, Javier Milei became the President of Argentina last week.

2} The questions is, what has led to the election of Javier Milei and his victory in Argentina.

Well he plans to get rid of the national currency which has depreciated massively against the dollar losing 99% of its value over the course of 2 decades. This would open the dollar for the Argentinian government to solidify what has already happened in the local economy. The people of Argentina have long used US dollars as their choice currency. It may have been difficult to get ahold of, but the people wanted something that was more stable and trustworthy.

To add spice to his selection, Javier has been a hardcore Bitcoiner believing in the notion of Bitcoin and how “With legal tender, governments scam you with the inflationary tax… Bitcoin is the natural reaction against central bank scammers; to make money private again”

It would be incredibly difficult for Argentina to move exclusively to a bitcoin standard. Even El Salvador, the shining example of a bitcoin country, has been unable to shed US dollars for transactions and general usage. But maybe the point is not to drop dollars and embrace bitcoin.

So maybe the direction of Argentina is the embracing of US dollars AND Bitcoin. Not dollars exclusively and not bitcoin exclusively. You need both of them at the moment. And that is what Javier Milei ultimately represents.

He can stop the people from getting massively poor in the next decade or so and would be interesting to see how he does so.

The global cryptocurrency market cap today: $1.47 Trillion

Daily change: 1.87% | Yearly change: 66.74% 

Bitcoin (BTC) is the largest cryptocurrency with a market cap of $725 Billion.

Weekly change: 0.59% | YTD change: 124.30%

Another important metric is Bitcoin dominance which can be used as a rough indicator of the relative strength of Bitcoin versus other cryptocurrencies. A high Bitcoin dominance means that Bitcoin has a large market share and is potentially more influential in the overall cryptocurrency market and vice-versa.

Bitcoin dominance: Current Year: 51.31% | Last year (Nov 2022): 38.31%

The market sentiment has greed levels in the higher range with current Bitcoin and Altcoin rally

Note: The data used is based on metrics like Volatility, Surveys, Bitcoin Dominance, Social and Google Trends. Source: Coinstats

Let's have a look at Ethereum supply changes post its merge to a PoS blockchain from PoW.

The significance of the chart - understand how the supply of Ethereum is decreasing post the merge, which means “deflationary economics” for the Blockchain

Supply change since merge POS -278,332 ETH

The graph highlights POS issuance since the merge. Impressive numbers, look super bullish for ETH long term given the supply of ETH is not growing as before

Bitcoin Sender Struck With $3.1M Transaction Fee, Largest in History Antpool mined the block and the sender's wallet was set up just minutes before the transfer.

Is Binance Big Enough to Survive a $4.3B Fine and Founder CZ’s Ousting? The "historic" settlement with the DOJ, CFTC and U.S. Treasury many finally allow the firm to come into compliance. But if it does, can the world's largest crypto exchange still grow?

And now I try to remind again how Crypto is global liquidity in the sense it is highly correlated, the chart below shows that Liquidity has been rising for sometime now which is highly bullish

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research