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Bitcoin struggles to gain momentum amid inflation woes in Argentina

Bitcoin's impressive 150% gains over the past two years pale in comparison to Argentina's staggering 300% inflation rate during the same period.

Despite its strong performance in Argentine Pesos (ARS) denomination, the price of Bitcoin in ARS is nearly double what is reported by Google or CoinMarketCap, brought by an alleged complex official currency rate manipulation by the Argentine government.

The government artificially strengthens the official rate to favor the ARS for its transactions, imports, and exports, with the aim of reducing capital flight, speculative trading, increasing import costs, boosting exports, and improving the trade balance. However, the move heightens inflation risks, hinder economic growth, and incentivize unofficial markets.

For investors in Argentina, Bitcoin has not proven to be a reliable store of value, as its gains of 150% were overshadowed by the official inflation rate of over 300%. In contrast, those who held US dollars or stablecoins saw their holdings increase by 297%, matching the inflation rate. 

Nevertheless, local investors recognize the upsides of self-custody and the scarcity of assets like Bitcoin, given the continuous depreciation of the local currency.