A record $50,000 of bitcoins were traded in Argentina during the second week of April.
Bitcoin's sixfold price increase this year is enticing to Argentines whose savings have been taking a hit from 25% annual inflation.
Local agent Rodolfo Andragnes said that while local trading of bitcoin still equals less than 0.1% of the almost $1 billion of Argentina’s foreign exchange transactions on a weekly basis, it has more than doubled since February.
"Some Argentines are willing to take very risky investments and bet on this thing which feels almost like a Ponzi scheme because they feel their options locally are even more dangerous,” Claudio Loser told Bloomberg. A former director at the International Monetary Fund and current head of the Centennial Group Latin America research company, Loser continued, "They don't see an easier way to save money."
TradeHill Inc., the San Francisco-based bitcoin exchange, will open its first Latin American office in Argentina in the wake of surging demand for the digital currency in the region, according to Bloomberg.
In addition to feeling the pinch of high inflation, Argentines face strict limits on foreign exchange purchases. They are prohibited from buying US dollars except for travel and such currency exchanges must be approved by the government's tax agency.
Bitcoins appeal to Argentines as a way to transfer money outside of the country and trade for foreign currency when they're abroad, TradeHill's Jered Kenna told Bloomberg.
"Argentina possibly has the most demand I've seen out of Latin America for bitcoins," he said. "It provides a way to move money out of the country and avoid capital controls."
Kenna is hoping to partner with a local bank in Argentina so he can open a bitcoin exchange there.