The volume of Bitcoin (BTC) in Argentine pesos has risen exponentially since the 2018 cryptocurrency crash, as the country faces a possible default on $65 billion in foreign debt.

Arcane Research posted data to Twitter on April 23 showing that the weekly volume of Bitcoin purchased with Argentine pesos has jumped 1028% since January 2018. However, the volume from BTC and USD has also shown substantial increases of 407% and 139%, respectively.

Source: Twitter

This surge is happening “as the government is about to default on its debt and the currency is suffering from inflation.”

Demand for crypto in uncertain markets

The Argentine government has yet to put forward a way for the country to restructure roughly $65 billion in foreign debt, leading to a possible default. Buenos Aires missed scheduled payments totaling $500 million on three foreign bonds on April 22, triggering a countdown to a formal default in mid-May.

Why are so many investors in the South American nation turning to BTC? The answer may be the same reason not so many in the United States got on board with cryptocurrency at the start of the COVID-19 pandemic.

Argentina’s financial crisis — in addition to global economic impact of the coronavirus — is in dire straits when compared to those in other countries, causing many worldwide to turn to crypto as a reliable asset uncorrelated with legacy markets. Any measures used to stabilize the Argentine economy can potentially cause deflation of the peso.

As the CEO of lending platform Celsius Network said, “A bet on Bitcoin is a bet that the deflationary pressures will win.”