Bitcoin Adoption Disparity: El Salvador Trails Behind Argentina, Notes Ark Invest Research Associate
Crypto News – A recent communication to investors from David Puell, a research associate at Ark Invest, has highlighted that El Salvador’s adoption of Bitcoin is lagging behind that of Argentina. In 2021, El Salvador made headlines by granting Bitcoin the status of legal tender. However, the extent of the nation’s actual embrace of this cryptocurrency appears to be a nuanced tale, according to Puell’s analysis.
Puell drew attention to statements made by Angela Dalton, the CEO of Signum Growth Capital, during a recent podcast hosted by Ark Invest. Dalton shared her firsthand observations from a visit to the Central American nation, noting that while awareness about Bitcoin is widespread, its usage remains relatively low. She remarked that a notable point of pride among the population is that El Salvador stands as an early adopter of novel technologies. Nevertheless, there are exceptions, like Bitcoin Beach in El Zonte, a tourist destination that exhibits a notably higher acceptance of the digital currency.
The factors contributing to the cautious stance taken by Salvadorans are the nation’s inclination toward the U.S. dollar and the volatility inherent in Bitcoin’s value, Puell argued. El Salvador adopted the U.S. dollar as legal tender back in 2001, a move that provided insulation from the inflationary challenges faced by neighboring countries. This decision resulted in a more dependable and trusted monetary system. In contrast, Bitcoin’s value has experienced a drop of over 20% since El Salvador’s legislative move to recognize it as legal tender, following a prior doubling in its value.
On the other hand, Argentina’s engagement with Bitcoin is undergoing a rapid transformation, fueled by the country’s economic predicaments. With projections indicating an inflation rate of 147% for 2023, the people of Argentina are actively seeking alternatives to preserve their financial assets. The economic backdrop in Argentina has provided an opportunity for Javier Milei, a pro-Bitcoin libertarian presidential candidate, to rise in political prominence. Milei’s success in the summer primaries on August 13 signaled not only a potential shift in the nation’s economic policies but also triggered a substantial surge in Bitcoin’s value. Within a mere 24 hours, the cryptocurrency’s value soared by over 20%, reaching 10.2 million Argentine pesos, as Puell pointed out.
Should Milei secure victory in the general election scheduled for October, both Bitcoin and the purchasing power of the Argentine population could see substantial gains, Puell emphasized.
Recent developments include Binance receiving approval earlier this month to become El Salvador’s “first fully licensed” cryptocurrency exchange. Furthermore, in the past week, ARK Invest and Glassnode introduced a novel metric designed to analyze the dynamics of Bitcoin’s supply and demand.
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