Foreign currency crisis in Argentina might have triggered Bitcoin growth

Bitcoin price edged higher ahead of Asian opening on Monday and touched $9,800 handle. At the time of writing, the first digital coin is changing hands at $9,765 with 1.5% gains on a day-on-day basis. Notably, the cryptocurrency market recovery coincided with Argentina'' decision to implement currency controls to fight the crisis.

The president of Argentina Mauricio Macri signed a bill that introduced limitations on foreign currency purchases. According to the new rules, large exporters will have to obtain permission from the central bank of Argentina to buy foreign currency and transfer it abroad. Individuals will not be allowed to buy over $10,000 per month. This measure will be effective until December 31, 2019.

Macri’s decree states that this step has been dictated by the need to “tighten foreign exchange regulation and strengthen the normal functioning of the economy”. The Government of Argentina hoes that these measures will help to deal with the ongoing economic crisis in the country.

Some Argentinians withdrew their savings last week for fear of default. The economy fo the country has been mired in recession for the second year in concession, while the unemployment is on the rise. An annual inflation is close to 40%.

In August, Argentine peso and government bonds collapsed amid the crushing defeat of incumbent President Mauricio Macri in the primary. At some point, on local exchanges Bitcoin was trading $300 higher than the average market price.

A further decline in the peso threatens hyperinflation, which will surely force many Argentineans to look for alternative ways to save money. Cryptocurrency may serve the need in this situation.

At the time of publication, BTC/USD is changing hands at $9,770, however, the further upside is limited as the momentum is fading away.