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Brazil's inflation rate reached 4.5%
Since the inauguration of the current Brazilian President Jair Messias Bolsonaro on January 1, 2019, Brazil's inflation rate has started to rise.
The Brazilian local media, the Rios Times, wrote in the report:
“The latest value of IPCA (Generalized Consumer Price Index) has reached the maximum in March of the previous year since 2015. IPCA is used to measure the official inflation rate of the country, which rose by 0.43% in February this year and only rose in March last year. 0.09%."
According to the report of the Brazilian Institute of Statistics and Geography (IBGE), the cumulative inflation rate in the past 12 months reached 4.58%.
Inflation triggers more active crypto transactions
Coincidentally, a few days before the inflation rate was released, Cointrader Monitor, a monitoring tool that analyzed the price changes of the country's bitcoin, said on Twitter that the Brazilian cryptocurrency exchange exceeded the volume of transactions on April 10, 2019. 100,000 BTCs.
At the same time, according to Coinlib's data, Brazil's legal currency, the Brazilian Real, has been the largest amount of money flowing into Bitcoin in the past 24 hours, totaling $315 million .
Bitcoin fever also appears in neighboring Argentina
The continued rise in the overall price level of goods and services, combined with other economic difficulties, has not only affected Brazil, but also Argentina, the second largest economy in Latin America, second only to neighboring Brazil.
Many people have suggested that economic problems have led to a sharp increase in bitcoin trading volume. The Rio Times wrote:
"The economic downturn may be the reason for the rise of Brazilian cryptocurrencies."
In Argentina, the economic situation is even more severe. The Argentine central bank was forced to tighten monetary policy three times last month. Despite this, the inflation rate in March continued to rise for the third consecutive month. Bloomberg reported that:
“In March, the inflation rate in the past 12 months rose to nearly 55%, and the consumer price index rose 4.7% in the month, exceeding analysts’ forecasts.”
According to data released by LocalBitcoins, a platform for cryptocurrency over-the-counter exchanges, in the past few weeks, Argentine investors have turned their attention to cryptocurrencies, and bitcoin transactions have increased significantly.
Similarly, after US President Donald Trump threatened to limit the remittances of illegal immigrants, LocalBitcoins' trading volume in Mexico is also soaring.
In this economic situation, cryptocurrencies are becoming more and more attractive. The most attractive thing is Bitcoin. Aside from other attributes, it is essentially borderless and deflated – by 2140, it will only create 21 million digital currencies.