49 2019). Both Argentina’s public and private sectors have begun to realize the potential of this field. Globally, cryptocurrencies such as Bitcoin are gaining traction and are particularly promising in places such as Argentina. A framework called the Bitcoin Market Potential Index, developed by Garrick Hileman at the London School of Economics, ranked Argentina first in the world. This index ranked countries on their utility of Bitcoin, measuring both the potential to be an alternative store of value as well as a substitute medium of exchange. Combining a variety of economic and social variables, the index ranked Argentina highly because of its persistently high inflation, large informal economy, recurring financial crises, high degree of technology penetration, and frequent monetary controls. It also took into account blockchain’s potential to be used in nonmonetary ways, such as for record keeping (Hileman, 2014). Argentina’s turbulent economic history makes the volatility of Bitcoin far more palatable for many Argentines. One of the common barriers to entry into the world of crypto is risk. Cryptocurrencies are more volatile than other investment options, which increases the risk investors are exposed to. The volatility of the S&P 500 is around 18%, whereas the price volatility of Bitcoin is around 30% (Bitcoinity, 2020; Harper, 2020). While this gap is enough to keep many investors in countries like the US away from cryptocurrencies, in many Latin American countries that constantly battle inflation, investors are more accustomed to this level of risk. In cases like Argentina, where inflation was over 50% in 2019, Bitcoin actually is less volatile relative to the alternatives. Bitcoin is the most popular and wellknown digital currency; however, there are other coins that also are important when considering cryptocurrencies in Argentina. As previously mentioned, a currency has two core principles: to be a store of value and to be a medium of exchange. Bitcoin is designed to have a cap of 21 million bitcoins. This fixed supply and high price volatility have sparked debate whether Bitcoin is more a currency or a commodity (Phillips, 2020). There are other cryptocurrencies that have been designed to better match those two currency principles. In this context, one particularly promising sector of tokens is that of stablecoins. As the name suggests, stablecoins are a type of cryptocurrency, the value of which is pegged to another source, yet they still benefit from the decentralized nature of the blockchain and are easy to transfer across the world. Stablecoins, such as DAI and US Dollar Coin, which are pegged to the value of the US dollar, have been tremendously popular in Argentina with its perpetual high demand for dollars. Local crypto exchange Bitso recorded a record trading volume of $2.3M in DAI during November 2020 (Engler, 2020). Across a wide variety of coins, cryptocurrencies have been taking off in Argentina. One of Argentina’s native cryptocurrency startups, Ripio, began in 2020 with around 400,000 users, and reached 1 million in under a year. Roughly 70% of Ripio’s users are Argentine citizens who needed an alternative to the restricted peso during the COVID-19 pandemic, while most of the remaining 30% are located in Brazil. Ripio’s users are buying and selling more cryptocurrencies at an expanding rate. Its chief brand officer, Juan Mendez, reported that the platform saw a tenfold increase in trading volume during 2020 (Handagama, 2020). Ripio is not alone in this massive expansion, as other crypto exchanges also have experienced record setting growth. The global cryptocurrency trading platform Paxful had never been very popular in Latin America until 2020. During 2019, Paxful had an average monthly trading volume of the ARS of less than $100. The crypto boom of 2020 caused the trading volume of ARS to skyrocket to over $300K (UsefulTulips, 2021). In order to learn more about this unprecedented growth, Paxful surveyed 1113 users in Argentina to gain insights into their sentiment on the current economic situation. The responses showed overwhelming support for cryptocurrencies. Overall, 73.4% of participants consider cryptocurrencies the best way to save their money for the future. Around 69.5% had invested in cryptocurrencies as an alternative digital asset to protect them from ARS inflation. Bitcoin is one of the primary digital assets traded on Paxful, so the company was curious what factors attributed to its
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