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The "crypto winter" has shattered the money-making hopes of many small investors around the world, but in inflation-plagued Argentina, cryptocurrency converts are holding on.

Inflation is expected to reach 100% this year in South America's No. 2 economy, and for many Argentine retail investors the priority is to protect the value of their savings - traditionally by buying dollars, but increasingly virtual coins.

"Some people got into bitcoin because they thought they'd get rich. Many have been disappointed," said Mauro Liberman, co-founder of the Crypstation cafe in Buenos Aires, where customers can pay for coffee and pastries with cryptocurrency.

"You're not going to become a millionaire, but in this economic context people are still finding a way to protect their savings from losing value, and as long as the economy is like this, there's going to be an opportunity for crypto," he told the Thomson Reuters Foundation in the cafe in the capital's Saavedra neighborhood.

Multiple screens at the cafe relay the latest coin prices to customers and a huge neon bitcoin logo decorates the wall.

Bitcoin's price has fallen about 60% this year, driving many small investors to ditch their coins, but in countries like Argentina and Venezuela with high double-digit or triple-digit inflation, virtual currencies retain some appeal.

Year-on-year inflation in Venezuela stood at 155% in October, according to Reuters calculations based on central bank figures, the highest in Latin America.

In Argentina, where many shops no longer post prices as they have to constantly mark them up, crypto penetration is 12% - about double the level of Mexico and Brazil, an April report from Americas Market Intelligence showed.

REMITTANCES

As well as being an option to shield bank deposits from inflation, cryptocurrencies are being used by people in some developing countries to avoid high commissions on remittances sent back from family members overseas.

Latin Americans, in particular, are increasingly using cryptocurrencies to make remittance payments, data from research firm Chainalysis shows.

"While it has fallen in other regions, adoption during the crypto winter has continued to grow in Latin America," said Dan Cartolin, LatAm and North America account executive at research firm Chainalysis, referring to the market downturn.

"Prices may have dropped, but we have seen increasing transactions."

Cryptocurrencies, which allow for "peer-to-peer" transfers between users online without intermediaries, were originally designed to be free of control by governments and central bank authorities.

While their relative anonymity and the lack of regulations are a boon for criminals, extremist groups and sanctioned governments, digital money has been adopted by ordinary people struggling to navigate economic crises - from Lebanon to Zimbabwe.

Still, about three-quarters of crypto users worldwide have lost money, according to an estimate by the Bank for International Settlements (BIS) that highlighted "multiple boom-bust cycles".

STABLECOIN SURGE

In Argentina, there has been a "sizeable increase" in the number of users who have swapped their other crypto holdings for stablecoins, said Marcelo Cavazzoli, chief executive and co-founder at Lemon Cash, an Argentine crypto exchange.

Stablecoins are pegged to a fiat currency such as the dollar and are meant to be less volatile than other cryptocurrencies.

Lemon Cash has about 1.6 million mostly Argentine users and has issued some 760,000 crypto debit cards, with user numbers rising about 35 times in the past year, Cavazzoli said. Holders can use the card like a debit card to pay with crypto anywhere.

Fabian Baez, a priest at a parish in Buenos Aires, recently launched a virtual wallet for donations in digital assets. So far, they have funded a safe house for victims of domestic violence and coding scholarships in low-income neighborhoods.

In Buenos Aires, advertisements for crypto companies had become ubiquitous in recent years in Buenos Aires, emblazoned on the back of city buses and billboards on the streets.

They are less common today, but many retail crypto investors are retaining their holdings - hoping for values to bounce back.

"The fall in price was terrifying - my savings dropped by two-thirds overnight," said Ervin Vazquez, a 40-year-old doctor from Guernica in Buenos Aires province who has been investing in crypto for the past three years.

"Crypto is a way for people with small savings ... to earn returns far greater than investing in U.S. dollars. Worst-case scenario, you lose a couple of hundred bucks. And if you win, you multiply your investment," he added.

FERTILE TERRITORY

In Venezuela, the local currency has depreciated by more than half this year, deepening the erosion of bank deposits diminished in value by hyperinflation.

That, along with a tax on cash transactions settled in foreign currency - in a country where the dollar accounts for roughly half of daily transactions, has made it fertile territory for crypto.

"In this highly distorted environment, crypto found a place as a means of payment," Aaron Olmos, an economist in the capital, Caracas, said by phone. "You won't see it advertised, but it's just a matter of asking."

In the city of Barquisimeto, Yeibert Godoy's monthly pay as a supermarket employee about three years ago barely covered his rent and household expenses as everyday prices galloped higher.

Today, the 26-year-old electrical engineer works at a crypto mining company and collects part of his salary in stablecoin, preventing it from depreciating on a daily basis.

"(Back then), from when I was paid to when I did the shopping, I'd already lost money. I watched my salary melt literally every second," Godoy said.

"In a context of high inflation and foreign currency restrictions, crypto continues to be a very important tool to store value," he said.