The Argentine peso fell over 45% overnight and Bitcoin (BTC) reached a premium of $12,300 in the country after the results of the primary presidential elections show the populist Fernandez duo will come back to power in December 2019. According to data provided by LocalBitcoins investors and holders in Argentina are selling their BTC between $11,350 and $12,800.
Mauricio Macri and his party “Together for Change” lost a very important primary election that would decide the next four years of the country. Macri lost 47% to 32% even when polls were showing a tight race in which the current president was just 3% behind his rival.
The results released by the local authorities pushed banks to modify their exchange rates against the US dollar reaching prices as high as AR$65 when the market closed around AR$45 per dollar before the elections on Friday. This represents a price increase of around 45%.
Despite having yet a chance to win the general election in October this year, the results seem to be impossible to be changed.
The Central Bank of the country has also increased interest rates to 74% while different Argentine companies fell over 60% in the market. This was one of the worst days for Argentinian stocks since the crisis the country experienced in 2001.
A few days ago, we wrote about how Bitcoin is becoming a safe haven asset during an economic crisis or financial uncertainty. The digital asset has also been traded in tandem with gold, an asset that is also in high demand when there is a political or a financial crisis.
According to Local Bitcoins, users in the country were selling the most popular digital asset for $11,350 and $12,800, a premium of over $1,400 with the current prices reported by CoinMarketCap. Although in Argentina Bitcoin has been used as a speculative asset, things turned out today to be in a completely different way. Investors and citizens turned to Bitcoin as soon as they realized their currency fell to one of the lowest levels in history.
Mauricio Macri has implemented painful cuts in public spendings that were previously used to keep services prices low to buy voters but that caused Argentina to have a deficit of 8% in 2016. This year, the fiscal deficit is expected to reach 0%.
Alberto Fernández and Cristina Fernández are expected to implement capital controls and other populist measures to gain support from a large part of the population that is living in poverty since 2001.