Argentina once again reached its breaking point, and the central bank stepped in to support the plunging peso despite new libertarian reforms. This crisis marks a sharp turn for those who saw hope temporarily at President Javier Miley’s parent market promise.
Milei: The libertarian waves sway
When Javier Milei took over power, he floated the peso and made headlines pledging to end Argentina’s financial problems through fundamental economic freedom.
Mairay was even cheered by Bitcoin advocates who believed his ideals could mark a historic break from Argentina’s long inflation and financial uncontrollability. The rhetorical attacks on central banks made Mairay naturally fit for those who viewed Bitcoin as the ultimate anti-inflammatory tool.
However, the hopes for stability have been resolved. Saifed Ampoule, Bitcoin advocate, Austrian economist and author of Bitcoin Standard, commented:
“The peso has dropped to 1,510 per dollar, and Ponzi is coming to an end despite 900 people on the black market, or even with central bank and government intervention when Mairay came to power less than two years ago.”
This week, the Argentina central bank was forced to spend around $1 billion in reserves to bolster PESO, the biggest intervention since 2019.
The move will only see capital flights, legislative shaking and public anger escalating after Milei’s government partially floated its currency in April. Inflation fell from a higher peak in August to 21%, one of the worst in the world.
The dynamics of the Argentina crisis
Argentine assets are being poured in as Congress blocks major austerity and privatization measures and undermine Mailey’s fiscal policy. The peso in the black market crashed into historic lows, but the reserves continued to bleed at an astonishing rate, threatening the country’s ability to meet debt and maintain limited intervention.
Central bank interventions now directly contradict the original libertarian programme, reflecting the failed pegs and emergency currency defenses of Argentina’s long history.
The IMF is concerned as the Argentinean dollar will diminish to what it describes as a self-realizing collapse. The more the state intervenes, the less confident they have in the peso as a valuable reservoir.
Monthly inflation eased to 21% in August, but this level remains catastrophic for savers, businesses and working for Argentina.
Argentina will turn into dollars, not bitcoin
Bitcoin supporters have repeatedly pointed to Argentina as a compelling example of why unauthorized non-national currencies can provide lifelines. PESO owners discover that their life savings have been destroyed many times, and Miley’s philosophical opposition to Fiat appeals to Bitcoiner, who dreams of a world without centralized money printing and state-imposed capital management.
The current clarification reveals a harsh truth. Libertarian ideology cannot rival deep institutional dysfunction. But the Argentine public was hit by inflation and failed reforms and flocked to the dollar on the black market rather than on the Bitcoin. The volume of global crypto exchanges surges at the moment of an acute crisis, but daily use remains limited compared to the desperate dollarization.
As reserves are low and attempts to stagnate reforms, Argentina is at a crossroads. Dollarization means waiving all monetary sovereignty, if so. Continuous interventions risk further depleting reserves and igniting more social anxiety.
Meanwhile, the fragile value of the peso reminds Argentina (and the world) of the risk of trusting political class and central banks, no matter how libertarian the brand is.
In this hopeless context, it focuses on the association of Bitcoin as a decentralized, seizure-resistant and preventing inflation asset. However, Argentina’s turmoil shows that adoption is slow burns, challenging institutional inertia, poor education and immediate pressures for daily survival.
Previous Blockstream VP Fernando Nikolic warned that during the true currency collapse, basic necessities such as food, fuel, ammunition (not digital assets) will become the only thing of actual value.
