Argentina is an unexpected place where the world of bits is roaring.
Don’t cry for Argentina bonds, but do invest in their entrepreneurs.
For decades, the US Dollar has been a ruthless factor in determining the economic policy management for Latin America. Argentina never seems to pass the test. Argentina defaulted in 1989, 2001 the restructuring of 2018 and 2020 makes Argentina the bond investors nightmare.
Latinamerica currency index . Source: Bloomberg.
However, currently there is something interesting happening in Argentina and it is the clash of two cultures. One is based on the peronism nostalgia and the other is not connected with politics, but with the strong entrepreneurial spirit of the Argentine people. Maybe you have never heard of Argentina as home to some very successful technology companies, like Globant, Mercado Libre, Despegar and OLX.
Argentine Technology Companies.
Others include Y-Combinator backed Bluesmart, satellite startup Satellogic, which raised $27M in funding earlier this year, online marketplace Agrofy, “identity-as-a-service” company Auth0, and crowdfunding platform Crowdium.
Argentina’s economic history has trained its population to be resourceful in the face of adversity, and today there are a number of success stories within Bitcoin and Fintech that reflect this. Take Affluenta, a peer to peer lending platform that raised $8 million last year. AgTech is also going well with startup Rootstock, among others. One of the strongest cases of the use of BTC as an alternative to the local currency is Argentina. A local entrepreneur with holdings in Bitcoin was not as adversely affected by the economic crisis as most others.
BTC against the Argentine Peso. Source: Trading View.
Much of the strength of Argentina relies on the human capital of its population. Historically, the most successful companies in Latin America have come from Argentina, and they were the most effective at targeting international markets.
Argentina is an unexpected place where the world of bits is roaring
Globant. Source: Tradingview.
Globant (GLOB) and Mercado Libre (MELI) are not really Argentine companies. They are multinationals that serve many different regions. For example, a major part of the Globant customers are in the US and the UK. Among their customers are Google and the big banks.
Mercado Libre. Source: Tradingview.
In conclusion, don’t cry for Argentina bonds, but do invest in their entrepreneurs.
Guillermo Valencia A
Co-founder Macrowise
June 12, 2020
Florianópolis, Brazil