Despite the growing risk in the crypto landscape, Latin Americans are still betting on the digital assets.
Crypto trade in Latin America increased by a staggering 40% over the past year, with Brazil and Argentina seeing a strong surge in the number of traders.
The sharp fall in the value of local currencies and the rising inflation is increasingly pushing Latin Americans to embrace digital assets such as cryptocurrencies, according to a study by Chainalysis.
A large majority of these investors are trying to use crypto as a hedge against inflation, with countries like El Salvador going to the extent of making bitcoin its official currency.
ICYMI: Check out the top 10 countries leading the 2022 Global Crypto Adoption Index. Download the full report to get the complete list and insights on the how and why behind #cryptocurrency usage worldwide.🌎 https://t.co/7vIQahxLgZ pic.twitter.com/hNRidYffAR
— Chainalysis (@chainalysis) November 3, 2022
In a Mastercard survey released in late June, more than 50% of respondents in Latin America admitted that they were using crypto to purchase goods.
People in Brazil and Argentina are placing huge bets on digital assets, prompting US financial giants such as Visa and Mastercard to launch crypto services. In Mexico, families are using cryptocurrency exchange Bitso to receive remittances from their relatives in the US.
With the sudden collapse of crypto exchange FTX, many traders in Latin America might find themselves in a financial mess. At least US$1 billion worth of customer funds has vanished from the platform, according to Reuters.