BTC expansion is unstoppable! After El Salvador, Argentina with 45 million people was captured

Author: MR.Proter

Editor: Jamie

On November 20, Javier Milley, the candidate of Argentina's Free Forward Party, defeated the current Minister of Economy, Sergio Massa, to win Sunday's presidential election, and Milley will be inaugurated on December 10.

Milley's political advocacy is reported to include dollarization, ending currency controls, shutting down central banks, and drastically cutting state spending, while strongly supporting BTC.

Why did Milley win the presidential election, what impact did he have on BTC, and will Argentina become another "country of BTC"?

I. Current situation in Argentina

Let's start with the current situation in Argentina, when it comes to Argentina, fans think of Messi, and economists think of inflation.

Argentina has one of the highest inflation rates in the world (Zimbabwe, Lebanon, Venezuela, and Syria, among others), with a cumulative inflation rate of a staggering 142% in 2023, a 32-year high.

Persistently high inflation means that Argentina's fiat currency, the peso, is constantly depreciating, prices are soaring, and people are miserable, since the peso is constantly depreciating, then people naturally tend to spend their money as soon as possible, because the money to buy a bag of rice this month may only buy half a bag next month.

Prices have risen too fast, so that many Argentines have to tighten their belts to live, and even can't afford to buy necessities, so the barter market is also gradually hot in Argentina, and some people spontaneously organize "barter clubs" to exchange clothes, shoes and other idle items for milk, bread and other necessities, which is indeed a good way to deal with the cash crisis.

Argentina's central bank has raised interest rates six times in 2023 to combat triple-digit inflation, raising the benchmark interest rate to 133%, but inflation remains high.

Persistently high inflation has also made Argentina's poverty rate even higher.

In the first half of this year, Argentina's poverty rate reached 40.1 percent, affecting about 18.4 million people, while extreme poverty reached 9.3 percent, leaving about 4.2 million people hungry, according to a report released by the Argentine Statistics Institute in September. **

Moreover, the poverty rate for children under the age of 14 is more than half, reaching 56.2 per cent, and the poverty rate for those aged 15 to 29 is 46.8 per cent, the second most affected group.

From the above data, we can get an idea of the current state of society in Argentina.

II. Milley's Radical Claims

After so many years of tossing and turning in Argentina, people no longer want the moderate policies of any politicians, they want to have a complete cleansing, a big break and then a big stand, and it is in this era that Milley was elected president.

But Milley is also more controversial, having worked as a goalkeeper for a football team, a lead singer in a rock band, an actor, a talk show and television presenter, an economist, a university professor and a stint at HSBC.

At school, he was also called "El Loco" ("Crazy") by his classmates for his short temper and aggressive rhetoric.

Some of his ideas are more similar to Trump's, and he also likes to be active on social media, often shows his face, and often speaks surprisingly, so he is called "Argentine Trump" by the media.

The reason why Milley is called a "madman" is mainly because of some of his "crazy words".

For example, Milley campaigned on a promise to "blow up" Argentina's central bank, proposing deep cuts in taxes and public spending.

He said that he would use a "chainsaw" to "saw" the current political and economic situation in Argentina. **

Milley argues that taxation is robbery, printing money is stealing, the welfare system is shackles, and God's (favored) system is the free market.

Milley's platform is indeed very subversive.

However, this is not a significant improvement for the Argentine people, who have been in power for many years by the Justice Party. Therefore, they may think that choosing an "amateur" with no political background to lead the country may bring new hope and change the existing predicament. **

As a 17-year-old who supported Milley said:

"That's the change we young people want. We're not afraid of Milley's maverick, I'm only afraid that my dad won't be able to pay the loan, and the Argentine peso is worth a dime now. **”

A 50-year-old writer said: "We are tired of the Justice Party, Milley is an amateur, but a madman is always better than a national thief." **”

As an Austrian economist, he advocated that government intervention in the economic field should be minimized to avoid distortions and restrictions on the market, believing that the market mechanism is the most effective way to allocate resources. Milley believes that liberalization and privatization are the panacea for the problem, which echoes the idea of BTC as a decentralized digital currency.

3. Argentina, the next "country of BTC"?

Milley criticized Argentina's central bank, calling it "fraud", saying that BTC "represents the return of money to its original creator". **

Milley called BTC an effective counter-tool to "central bank fraudsters" because fiat currencies allow politicians to deceive Argentine nationals through inflation, while BTC can provide opportunities in the process of eliminating Argentina's central bank.

According to Milley's vision, after the closure of the country's central bank, **BTC and cryptocurrencies will also become the main force as a remedy for inflation in Argentina. For this reason, Milley has also been called a "BTC maniac" by the media and the opposition. **

As we all know, the supply of BTC is constant, only 21 million in total, and the total amount and issuance speed are strictly limited by the algorithm (halving every 4 years on average), BTC inflation rate can be pre-calculated according to the algorithm, currently only 1.74%, after the halving next year, it will be less than 1%, and it will be lower and lower in the future.

Whether it is the total amount, the speed of issuance, the inflation rate, etc., the BTC is operating according to the established algorithm, without the intervention of individuals or institutions.

In contrast, the Argentine peso has an inflation rate of more than 140% because, in theory, the central bank can issue unlimited amounts of money. Argentina's central bank can dilute the purchasing power of the currency in the hands of the population by issuing more pesos.

Therefore, Milley believes that the central bank's excessive issuance of currency is a robbery of the people, and he wants to shut down the central bank. He felt that instead of letting the Argentine peso be indiscriminately distributed, it would be better for the people to choose more stable currencies, such as the US dollar and cryptocurrencies.

Let's take a look at the adoption of cryptocurrencies in Argentina.

According to survey data from Americas Market Intelligence, 98% of respondents said they had heard of cryptocurrency.

With 12% of Argentine smartphone users buying cryptocurrency at the end of 2021 and 51% in April 2022, and a whopping 27% of smartphone users buying cryptocurrency on a regular basis, the adoption rate of cryptocurrencies in Argentina is growing at a rapid rate.

In Argentina, 66% of crypto users are men, 34% are women, and 44% are 25-39 year olds.

In addition, the main reasons for Argentines to buy cryptocurrencies include: investment (71%), protection against inflation (67%), and avoidance of government control (46%).

Investing in cryptocurrencies, not only to protect against the effects of inflation, but also to obtain significant investment returns, is the main reason why more and more Argentines are buying cryptocurrencies and the main reason why BTC are becoming more and more popular.

Regarding the usage rate of BTC in Argentina, we can compare it with El Salvador.

El Salvador is one of the most BTC-friendly countries in the world, BTC has become legal tender in the country, and in November 2022, El Salvador's President Nayib Bukele announced a BTC purchase plan that promised to buy one BTC per day.

While BTC is well-known in El Salvador, usage lags behind Argentina, according to an August 2023 study by David Puell, a research associate at Ark Invest.

This is mainly because of soaring inflation in Argentina, which has led Argentines to seek alternatives to protect their wealth.

As a BTC of digital gold, when a country's economy is facing collapse, BTC will take the opportunity to popularize it among the people, which will eat away at more of the country's fiat currency market, such as Ukraine, Turkey, and Argentina, and Milley was also successfully elected president of Argentina under such circumstances.

We look at the future potential of BTC in Argentina from the perspective of the age distribution of the Argentine population.

According to statistics, Argentina currently has a population of more than 45 million, and the majority of people who buy BTC are between the ages of 25 and 39 (44%), which is also the main group of Argentine society.

The age distribution of the population in Argentina is a pyramid shape, indicating a high proportion of young people, who are potential buyers of BTC in the future. The election of Milley, the "BTC Maniac", will surely promote a significant increase in the adoption rate of BTC in Argentina.

As for whether BTC can be elevated to Argentina's legal tender, and whether BTC can save Argentina (inflation), it remains to be seen how long it will be verified.

P.S This article does not constitute any investment advice