Crypto adoption increased in Latin America amid inflation
One of the biggest regions on the planet for crypto adoption growth is Latin America. This is mainly due to economic instability, failure of monetary policies and high inflation due to devaluing of local currencies.
In its Crypto Landscape report for Latin America for the second half of 2023, Mexican crypto exchange Bitso stated that bitcoin and stablecoins dominate the buying behavior of local markets.
The rise of Crypto adoption in Latin America
Bitcoin makes up 53 percent of the average portfolio composition, he said. However, digital dollars have been the fastest growing cryptocurrency in the region.
The two leading stablecoins, USDT and USDC, comprise 26% and 17% of the average portfolios of Argentine and Colombian users, respectively. No wonder, this is the economic situation and inflation in each country.
The buying behavior reflects the same trend regarding preferred cryptos. 68% of all cryptos discovered in the second half of 2023 are Bitcoin and stablecoins.
However, Argentina was an exception, with digital dollars accounting for 60% of purchases, compared to just 13% for Bitcoin. The Organization for Economic Cooperation and Development announced that Argentina's inflation has risen to 211% and will rise to 250% this year. In addition, the price of Bitcoin recently reached a new high against the Argentine peso.
In Mexico and Brazil, the preference for Bitcoin was greater, 40% BTC vs 28% for stablecoins and 35% vs 19%, respectively. In Mexico, XRP was a significant component of the average portfolio comprising around 8% of total average holdings.
Brazil is the only country where memecoins and altcoins are a significant part of the portfolio, he reports. Brazilians have an average of 17% in altcoins versus 11% regional holdings.
Moreover, they like Shiba Inu (SHIB) but are not interested in Ethereum (ETH) compared to other Latin American countries.
Read more: 7 ways to cope with rising inflation in retirement
The report also noted that crypto holders in Latin America held firm during the bear market.
“The data suggests that despite the crypto industry concerns and issues that arose in 2022 and early 2023, large and long-term cryptocurrency holders continue to hold.”
Brazil and Argentina lead the way.
Female crypto adoption is also increasing in Latin America, although still lower than that of males. He pointed out that the rate of adoption among women increases with age.
Colombia and Brazil have the most balanced gender distribution at 33% and 31% women respectively.
He also mentioned that countries like Brazil, Argentina and Mexico are among the top 20 in the world in terms of crypto adoption. However, in 2023, Colombia reported significant growth in registered users of the exchange.
Bitso also described the region as having a “high index of underbanking and unequal access to financial services”.
“Latin America shows incredible enthusiasm for cryptocurrencies, making it an active and dynamic area in the crypto space.”
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