August 11, 2020
A current market report from Arcane Research, an analytics company, has informed an increase in Bitcoin transactions through Brazil and Argentina.
The evolution was compared to the monetary status of both countries, which looks severe. So, local investors are seizing the opportunity by turning to the cryptocurrency to hedge against the rising inflation.
Brazil sees a 168% increase in weekly Bitcoin trading volume
Regardless of the existing Coronavirus pandemic, Turkey, Brazil, and Argentina documented new records in weekly Bitcoin trading volume for the last two months. Arcane Research states that Brazil witnessed a 169% increase, 20% in Argentina, and five% in Turkey, in terms of fiat currency.
The flow in Bitcoin trading volume in these countries is obvious that the cryptocurrency is rather measured as an instrument by the traders in contradiction of the weakening value of their fiat currency. More so, in Argentina, local currency guidelines make it difficult for the traders to seek protection in foreign currency like dollars or euros.
Therefore, this regulation perhaps has turned in favor of Bitcoin, as traders gradually turn to the cryptocurrency as a mechanism to hedge the nation’s diminishing currency. According to Useful Tips, Argentina broke above $1 million in weekly Bitcoin trading volume last week. This was the first time. Bitcoin traders in the country could get that point.
Diminishing fiat currency
Argentina has been in monetary crisis before the current Coronavirus pandemic, as well as Brazil. The pandemic deteriorated the whole situation in both countries, as their national currency continues to nose-dive in value. The report says that Brazil’s fiat currency dropped by over 30% against the US dollar.
Also, the interest rate cut down to two percent per year, thereby eliminating fixed-income instruments as an ideal investment choice at the moment, in favor of stocks, funds, and cryptocurrency per se.