BTC Proponent Javier Milei Is Argentina's New President
The daily crypto update for institutional investors
BTC Proponent Javier Milei Has Won Argentina’s Presidential Election - In This AM’s Note, We Review Milei’s Plans For Argentina & Discuss Possible Implications For Crypto
Argentina's presidential elections have been on the crypto community’s radar for some time due to Milei’s outspoken support for BTC. For instance, in a widely circulated interview, Milei described the central bank as a scam while BTC represents the ‘return of money to its original creator: the private sector.’ However, Milei has not presented any policies, positions or plans towards BTC.
The mainstay of Milei’s plans is unwinding the size of Argentina’s government. Crucial to this is the abolition of the central bank and the peso. Instead, the country would embrace the US dollar, but Milei would also allow Argentines to use their preferred currency. In September, Milei told local media he would appoint Emilio Ocampo, a professor of finance and economic history who has previously worked on Wall Street, to lead the abolition of the central bank and dollarization. Last year, Ocampo wrote a book called ‘Dollarization: A Solution for Argentina.’ However, Ocampo has been critical of BTC in the past. For instance, in 2021, a month after El Salvador adopted BTC as legal tender, Ocampo posted on X that the country’s ‘gamble’ is ‘not playing very well with the bond market.’ Ocampo has shared other critical views on BTC, such as its perceived environmental cost.
Diana Mondino, a Milei economic advisor who has been identified as the country’s incoming foreign minister, spoke at a BTC conference in Buenos Aires last month. Asked if Argentina would make BTC legal tender if Milei were to be elected, Mondino responded that the administration would allow individuals to choose which currencies they transact in.
Takeaway: Milei takes power in a country with significant challenges. Argentina, for example, has a poverty rate of 40%. From a policy perspective, many issues are competing for priority. However, the president’s intentions to completely liberalize the use of money in the country is a significant opportunity. Chainalysis’ 2022 Global Crypto Adoption Index ranks Argentina as 13th in overcall global crypto adoption. Furthermore, notable crypto firms like Bitfinex, have launched products to serve the Argentine crypto market. In this context, while El Savlador created national laws for the top-down embrace of BTC, Argentina's embrace of crypto in the shorter term could be more bottom-up. By allowing individuals to choose which currencies to use, Argentina, against the backdrop of decades of economic hardship, could become a hotbed for crypto innovation.
CRYPTO HEADLINES
DeFi trading venue dYdX’s insurance fund suffered USD ~9M in losses during a period of substantial liquidations in the asset yearn.finance (YFI). The platform’s team said no user funds were affected from the incident, while the ‘insurance fund remains well funded with $13.5m in funds remaining.’ The project’s CEO said it ‘was pretty clearly a targeted attack against dYdX, including market manipulation of the entire $YFI market.’ - link - @dYdX
As expected, the SEC delayed its decision to approve or reject applications from Franklin Templeton and Global X to list spot BTC-based ETFs on Friday. The SEC’s next deadline is January 10, where it must decide to accept or reject the Ark 21Shares Bitcoin ETF application. - link - @CoinDesk
Crypto media outlet CoinDesk is being acquired by Bullish, a crypto exchange founded by the team behind EOS, Block.one. The transaction, between Bullish and CoinDesk’s parent, is an all-cash deal, whereby the financial terms were not disclosed. - link - @WSJ
Taipei-based crypto trading firm Kronos Research said it ‘experienced unauthorized access of some of [its] API keys’ over the weekend. ZachXBT, a Twitter personality who shares his blockchain data insights, estimates the losses totaled USD ~25M worth of crypto. The company added that it has paused trading and that the ‘losses are not a significant portion of our equity.’ - link - @KronosResearch
Fidelity filed to list a spot ETH-based ETF on Friday. The investment manager joins six other issuers attempting to list the product in the US, including BlackRock, Grayscale, VanEck, 21Shares/Ark, Hashdex, and Invesco/Galaxy. - link - @CoinDesk
Panoptic, a startup aiming to build an Ethereum-based options trading platform, has closed a USD 7M seed round. The raise was led by Greenfield Capital and included participation from HashKey, gumi Cryptos Capital (gCC), L1D, and Heartcore Capital, among others. - link - @TheBlock
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OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
Javier Milei Argues That Argentina’s Central Bank Should Not Exist, The Economist, September 29, 2023
Javier Milei, Argentina’s incoming president, explains why he wants to dismantle the country’s central bank.
CRYPTO MULTIMEDIA
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CHART OF THE DAY
USDt trading against the Argentine peso (ARS) has seen volumes magnitudes times higher than trading for BTC. This dynamic is true for other emerging market currencies, such as the Turkish lira...
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