Bitcoin price has a rocky start to the weekend on Friday, with selling pressure making intense bids to break the USD 7,000 support line, which is still holding strong as noon approaches in Central Europe.

While the panic should be setting in soon for most retail buyers, the serious long-term holders and institutional investors that we spoke about in yesterday’s analysis will probably be happier today. After all, they were the ones who predicted a return to crypto volatility and will now see this as one of the few chances remaining in the year to buy Bitcoin at discount prices, pending its eventual bull run to the top coming up to the May 2020 halving event in just over six months.

The daily dip of almost 15% of Bitcoin has shaked the rest of the crypto market, with altcoins totally unable to stave off selling pressure everywhere. This, however, has not dampened the demand for crypto, particularly for Bitcoin, in Argentina, where hyperinflation is reaching new heights, making life extremely difficult for citizens there.

Localbitcoins volume statistics show that trading on the popular P2P platform has hit an all-time high, in the last two weeks, breaching USD 20 million. The central bank had already banned Bitcoin purchase this month, but if they were hoping to plug the breach, they were wrong, since Argentinians did exactly the opposite of not buying Bitcoin. Starving off the traditional exchange routes, they have been turning to OTC options and buying from holders, as Localbitcoins stats show.

The reason is really quite simple. Argentine peso has lost more than 85% of its value against the US dollar since 2014, and has never really been a currency its citizens have been confident in. In the past, people have regularly converted peso to dollar whenever the opportunities arose. However, recent capital controls have prevented them from continuing to do so, despite the US dollar that is essentially defining the value of goods and services — leading to hyperinflation in the prices quoted in pesos

Crypto investor Tim Draper had earlier suggested that Argentina legalized Bitcoin as a means for the country to escape economic improverishment, by halting peso’s devaluation and providing relief to the resulting emigration of talent.

Anchor CEO Daniel Popa told Cointelegraph that crypto’s volatility has not deterred Argentinians from flocking to Bitcoin, trusting Bitcoin price to store value better than the peso. He explained that stablecoins could be the short-term intermediary solution:

“Unfortunately, bitcoin does not offer predictability, underlining the ongoing need for a universally-accepted stablecoin and financial standard that could be adopted by anyone in the world, including those suffering from the negative economic impacts that stem from war, natural disasters, health crises, and disruptive monetary policies.”

Meanwhile, Bithumb and Binance have both come out to deny the rumors of China crackdowns on their offices in the country. Some analysts are saying that these rumors are what is causing the current Bitcoin price declines, but both crypto exchanges, who share a lot of the global daily trading volume, say this is not true.

A Bithumb spokesperson sent a statement to media outlet The Block, confirming that the reports of a police raid and closure of its Shanghai office were fake news. It confirmed that its office here continues to manage operations:

“We have one of our blockchain technology research and development teams based in Shanghai and the projects are continuing steadily without pause.”

This immediate response came on the back of a report from ifeng.com who said that Bithumb’s workers had been given a government notice of crypto investigation and were told to take a “long vacation”.

Binance has also come forward to dispel the fake news, ridiculing the reports which failed to acknowledge that Binance didn’t even have a physical presence in Shanghai:

“The Binance team is a global movement consisting of people working in a decentralized manner wherever they are in the world. Binance has no fixed offices in Shanghai or China, so it makes no sense that police raided on any offices and shut them down… We also encourage our friends from the media to verify if their ‘sources’ are telling the truth or presenting their own agenda.”

 

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