Curls, caves, and shadows: how cryptocurrencies thrive in (poly)crisis

Abstract

Bitcoin, the most important and well-known cryptocurrency, was born out of the Global Financial Crisis (GFC) of 2008–9. In a context of institutional mistrust, cryptocurrencies emerged as part of a larger wave of criticism toward governments and banks. Recent works in political economy and political geography have underscored the interlinkages between cryptocurrencies and crisis, wherein crypto ecosystems not only reflect price volatility, but they exploit the vulnerabilities, frictions, and tensions of global and domestic financial systems. Argentina is a notable case of the recent uptake in Bitcoin and stablecoins because of major inflationary pressures and other distortions in the economy. This article explains how cryptocurrencies are not just a response to crisis but simultaneously thrive in contexts of upheaval and distortion. Cryptocurrencies in Argentina serve as shortcuts to access US dollars and as channels to avoid government regulation through exchanges and wallets. The businesses that promote cryptocurrencies leverage arbitrage, lean toward centralisation, and succeed in alliance with traditional financial institutions. The article draws from field research in Buenos Aires and interviews with Argentina’s booming cryptocurrency business sector as well as exhaustive secondary research.