Bitcoin is trading above $37,000 this Monday (20) and is up 1.9% daily after Javier Milei became president of Argentina. Milei, a self-proclaimed anarcho-capitalist, promises to end the Argentine peso and its central bank, and adopt the dollar as the country’s main currency.
Even before his election, his party had already declared that Argentina would be transformed into a ‘Bitcoin paradise’. Therefore, if Milei keeps his promises, our neighboring country could follow in El Salvador’s footsteps and become a new attraction for libertarians.
“Do you know how many members? [Nayib] Bukele had legislative power when he took office [de presidente de El Salvador]? Zero. If you know what you want to do, how to do it and have conviction, then you do it.”
Javier Milei op @nayibbukele:
“Do you know how many seats in Congress Bukele had when he took office? Zero. You can see that if you know what you want. And you know how to do it. And you have the conviction to do it. .”
Just the beginning… 🇸🇻🧢🚀 pic.twitter.com/FxlR2qSbYb
— Stacy Herbert 🇸🇻🚀 (@stacyherbert) November 20, 2023
Javier Milei is elected president of Argentina and causes Bitcoin to rise
With 99% of the votes counted, Javier Milei, from the Libertad Avanza party, wins the elections for the presidency of Argentina with 56% of the votes. Sergio Massa, Minister of Economy, has only 44% and admits defeat.
As a result, an ETF on the Buenos Aires Stock Exchange opened this Monday (20) up 13% in the US. However, Bitcoin was the first to be tainted by the victory of Milei, who considers himself an anarcho-capitalist and a big fan of Bitcoin.
Still at 8pm this Sunday (19), Bitcoin appreciated around $500 after Milei’s victory was considered certain before the total poll count. As you can see in the chart below, trading volume also spiked.
One of Milei’s proposals is to reduce the size of the state of Argentina. In addition to privatizations, the new Argentine president also promises to make cuts to several ministries in his country, including tourism and sports, transportation, labor, health care and others, which could be transferred to third parties.
“Stay [os ministérios de] economy, infrastructure, human capital, foreign relations, security, defense, home affairs and justice. Away with the parasites, away!”
Another promise is the closure of the Central Bank of Argentina and the introduction of the dollar as the country’s main currency.
According to current data, the Argentine peso inflation rate currently stands at 142.7% year-on-year, which helps explain the victory over current Economy Minister Sergio Massa. Since 1980, Argentine peso inflation has reached 902,382,050,000%.
Regarding the transition to the dollar, Brazilian economist Fernando Ulrich emphasizes that this is a “big challenge” for Milei, who will take office on December 10.
“Dollarization and the end of the Central Bank are the most important program and this will not be implemented overnight”explains Ulrich. “In fact, it is a program that will be implemented little by little, especially since it depends on other variables, such as, for example, the international reserves of the Central Bank of the Argentine Republic. We don’t know that number.”
“The Central Bank must buy back all monetary weight, for this it needs dollars to match the pesos in circulation. This depends on the exchange rate, but it also depends on the assets that the Central Bank of Argentina has. on the balance sheet.”
Javier Milei is seen as an experience for Latin America
Just as El Salvador serves as an experiment for the adoption of Bitcoin as legal tender in a country, Javier Milei’s victory as president of Argentina can also be seen as an experiment for more libertarian policies on a left-dominated continent.
As heir to a country devastated by inflation, Milei will have four years to prove that his policies are enough to free Argentina from decades of mismanagement before seeking re-election. However, its success or failure could also have consequences for elections in neighboring countries.
Finally, the new Argentine president has already promised to cut ties with left-wing governments such as Brazil and China. In any case, he noted that Argentine citizens and companies will continue to trade freely with these countries.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.