The Latest On News From Crypto world: As Local Fiat Currencies Plunge, Latin Americans Turn To Bitcoin
Latin America is the latest hub for crypto. Read all about it. Get the latest when it comes to news on crypto acceptance by nations in the world.
The Current Scenario In Bitcoin Trading
A new report shows that Latin Americans have embraced cryptocurrency as a store of value while their fiat currencies depreciate. Further driven by the lack of banking access and remittance needs is the bitcoin adoptions in the region.
Latin American Bitcoin Adoption
Based on on-chain data and interviews with experts in the region last week is blockchain data analytics firm Chainalysis releasing a new study of cryptocurrency usage in Latin American counties. Due to be released this month is the study which is a part of the firm’s Geography of Cryptocurrency Report. The truth here is that driven by factors similar to the lack of banking access, remittance needs, and the devaluation of local fiat currencies is the cryptocurrency adoption in Latin America.
A major drive for cryptocurrency adoption in Latin America is according to Sebastian Villanueva managing the Chile operations of crypto exchange Satoshitango the lack of banking access for individuals and businesses. He further says there are a lot of people having uneven income because they do gig work for Uber or even places like that making it hard for them to get a bank account and furthermore asserts that:
Many young people in Latin America turn to cryptocurrency as a means of storing value without easy banking access.
Villanueva noted that many Latin Americans use stablecoins like DAI as well as USDC locking in their savings. According to Chainalysis a significant share of the stablecoin transfer volumes in the region comes from traders who use fiat to buy bitcoin or stablecoins like tether as also from those local exchanges or P2P exchanges using those funds to trade on larger exchanges including Binance providing more trading pair and greater liquidity. Further on the firm noted that this comes to be the common pattern not just in Latin America but also in developing regions as well.
What Does Chainalysis Have To Say?
Noting that the amount of P2P trading volume in many Latin American countries rises as the native currency depreciates, currency instability is another factor driving the cryptocurrency adoption in Latin America as claimed by Chainalysis. Further elaborating, the firm was of the opinion that:
Suggesting that cryptocurrency users in Argentina, Uruguay, Colombia, and Chile, in particular, are turning to cryptocurrency as a means to store value when their native fiat currencies are losing value is the correlations each of which is statistically significant.
Villanueva continued that as their fiat currencies lose value, Venezuela and Argentina especially are printing money like crazy driving a lot of cryptocurrency adoption. Further limiting their options for secure savings and increasing the need for cryptocurrency are some countries like Argentina, limiting the amount of US dollars citizens can buy per month.
He further noted that driving cryptocurrency adoption in Latin American countries is reiterating that the worsening economic conditions and associated civil unrest. Thereby:
There were mass protests over education, healthcare, and overall economic conditions in last October in Chile. As they grew by about 35% fiat pay platforms saw huge decreases in activity during that time. There are no gatekeepers in crypto and people just want a safe way to store money.
The Leading Nations In Latin America With Their Stand On Crypto
With Brazil in the lead in terms of the most cryptocurrency usage by on-chain volume, Latin America also has a robust crypto trading scene. As recently reported, a distant second is Venezuela whereas the country accounts for the third-highest number of transfers on Localbitcoins as also Paxful that are two of the most popular worldwide P2P exchanges.
Defined as transfers of less than $10,000 worth of cryptocurrency, the region has the second-highest share of retail crypto activity. They prefer using large international exchanges like Binance rather than local exchanges to access more trading pairs as well as greater liquidity, whereas professional traders still account for almost 80% of the total volume transferred thereby in a given month. Representing between 5% and 9% of all cryptocurrency activity in any given month Chainalysis detailed that overall Latin American countries sent $25 billion worth of cryptocurrency and received $24 billion worth in the past year.
The Few Final Takes
Talking to Chainalysis were representatives from a Brazil headquartered crypto hedge fund called Hashdex that for those representing pension funds and family offices was the desire for potential high yield assets with uncorrelated returns driving the cryptocurrency adoption amongst professional investors.
So, this is how cryptocurrency is performing in Latin America. More news on the same topic from us in a short time.