When you think of Argentina, you might think of economic instability, inflation, or even a man named Lionel Messi. But you never thought that Argentina might follow in El Salvador’s footsteps and become a growing crypto hub for miners. But why does Argentina want to do this, and why is the country slowly developing into a cryptocurrency center for miners and investors?
Miners in Argentina benefit from cheap subsidized electricity bills Although Argentina is a net importer of natural gas, consumer electricity bills only account for 2% to 3% of average monthly income, which is an incentive to attract miners to enter the country.
“Even after the Bitcoin price adjustment, the cost of electricity for anyone to mine at home is still only a small part of the total income,” Said Nicolas Bourbon, who used to mine digital currency in Buenos Aires.
Bitfarms is a publicly traded Bitcoin mining company that announced the expansion of its business in Argentina from 60 MW to 210 MW. “Enough to support approximately 55,000 new-generation miners and generate approximately US$650 million in revenue.” In turn, this will reduce the break-even cost of mining, which is US$7,500 in Canada and US$4,125 in Argentina. As electricity accounts for 75% of mining costs, Argentina is unstoppable in becoming a South American cryptocurrency powerhouse.
Argentina’s economy is the main breeding ground The foundation of the crypto world.Cryptocurrency is seen as a way for locals to hedge against cyclical economic crises, including repeated currency devaluations, defaults, hyperinflation, and the three-year economic recession now worsened by the pandemic.
The return of foreign exchange control in recent years has also given Due to the surge in demand for non-peso assets, Argentines banned from buying U.S. dollars are more motivated to mine digital tokens As of May 30, 2021, the value of Bitcoin on the unofficial market has soared to nearly 5.9 million pesos, while the official exchange rate is about 3.4 million pesos. Cryptocurrency is also used to convert pesos into U.S. dollars, circumventing government restrictions through peer-to-peer transactions, The above transaction rose from less than US$200,000 at the end of 2019 to US$600,000 last year.
Cryptocurrency has always received attention in Argentina, but it is a hope for locals to survive these difficult times.but From a financial perspective, Bitcoin and other crypto assets are more interesting for investors who can help save the Argentine economy through investment, They also created a huge hype, brought creativity and innovation. Through the recently proposed bill that allows workers to pay wages in cryptocurrency, Argentina once again has a very real opportunity to be at the forefront of the cryptocurrency world.
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