Bitcoin blasts past its 2021 all-time high in Argentina, but hyperinflation outpaces gains

cointelegraph.com:

Argentina has grappled with hyperinflation for several decades due to failed policies that have led to budget deficits. As time marches on, the likelihood of Argentina — home to 47 million people — facing a full-scale currency collapse looms. But what are the prospects for increased adoption of Bitcoin (BTC), given its outstanding track record when priced in the local Argentine peso currency?

Throughout its history, the Argentine government has frequently resorted to inflating the money supply through bank deposits or government bonds. Notably, Argentina’s aggregate money supply M1 — comprising currency, demand deposits and other checkable deposits — has surged from 2.81 trillion pesos in July 2019 to a staggering 10.66 trillion pesos, marking a 277% increase over three years.

Bitcoin’s price on domestic exchanges has soared to 19.6 million Argentine pesos, up from 14.2 million when BTC reached its all-time high in United States dollars in November 2021. This means that despite a 61.5% drop from $69,000, investors in Argentina have still managed to accrue gains of 38% when measured in the local currency.

However, one may encounter a different result when consulting Google or CoinMarketCap for Bitcoin’s price in pesos. The answer to this discrepancy lies in the official currency rate for the Argentine peso, which is more intricate than most investors are accustomed to.

To begin with, there is the official rate, known as the “dollar BNA,“ set by Argentina’s central bank and used for all government transactions, as well as for imports and exports.

Observe how the Bitcoin price in Argentine pesos, as effectively traded on cryptocurrency exchanges, is nearly double Google’s theoretical price.

This theoretical price is calculated