The author of "The Bitcoin Standard" warns: The collapse of the Argentine bond eyewash is imminent, and BTC is the only safe haven.

Economist and author of “The Bitcoin Standard” Saifedean Ammous issued a stern warning, stating that Argentina's financial system is on the brink of collapse, and the Milei government's economic plan is essentially a “debt and inflation Ponzi Scheme” supported by unsustainable bond yields and unrestrained money printing, with Bitcoin potentially becoming the last bastion for local investors to protect their assets.

Argentina's Financial “Bicycle”: The Ponzi Scheme Behind High-Yield Bonds

Ammous posted on platform X directly pointing out that the Argentine government has created a distorted financial system, where bond speculation has become the only way to achieve financial security. “So far, the only concrete achievement of the Milei government is the destruction of the currency and the creation of a junk coin casino,” he harshly criticized.

The core of the crisis is a high-yield arbitrage trading known locally as “la bicicleta financiera” (financial bicycle), where investors purchase short-term government bonds that supposedly offer interest rates exceeding the rate of peso depreciation. Ammous states that this setup, which has become the most profitable industry in the country, is typical of a Ponzi Scheme.

“This type of arbitrage is clearly unsustainable, as when the government offers high returns on its bonds, it needs to create more pesos, which will devalue the peso,” he wrote. “This type of arbitrage cannot last forever.”

Signs of collapse have already appeared

Ammous pointed out several warning signals:

· Despite the 540 million dollar foreign exchange intervention, the peso has already broken through the target exchange rate range.

· Bond yields soared to 88%

· The Argentine stock and bond markets have experienced a sharp decline.

· The Milei government is facing corruption allegations and recent electoral defeats.

He warned that once the depreciation of the peso exceeds the bond returns, investors will sell off bonds and pesos, triggering a rush for safer assets like the US dollar or Bitcoin. “The peso will collapse, bonds will collapse, and the government will only be able to beg the International Monetary Fund for assistance,” Ammous predicted.

Bitcoin: A Safe Haven in the Argentine Financial Crisis

According to Ammous, the scale of these arbitrage trades has now reached short-term debts of 40 billion to 80 billion USD, pulling capital away from productive uses. He also pointed out that insiders and foreign institutions like JPMorgan are profiting from this scheme by timing their entries and exits.

“Random bankers from around the world have successfully outperformed the vast majority of stocks and traders globally by simply playing this manipulated Russian roulette game.”

In summary, Ammous stated that Milei's refusal to close the central bank exposed his liberal rhetoric as a facade. “The longer it lasts, the greater the harm. Hope to stop the Ponzi Scheme is not idealism; it is a practical material need.”

In such a financial environment, Bitcoin, as a decentralized asset that is not controlled by the government and has a limited supply, is becoming an important tool for Argentinians to protect their wealth. With the increasing instability of the national currency and bond market, the hedging properties of Bitcoin are particularly important in high-inflation countries like Argentina.