Argentina Registers Huge Demand For Bitcoin Despite The Crypto Winter

0

The by-word at the moment is that the crypto market is still knee-deep in its latest bear market- the so-called crypto winter.

While that does count for traders in the wider crypto community, the reality on the ground in terms of usage is stark different.  Numbers suggest that bitcoin usage has continued to grow, especially when transaction volumes on P2P site LocalBitcoins are analyzed.

The highest numbers come from the Latin America region, with Venezuela and Argentina the leading locations. While politically unstable Venezuela has hoarded most of the attention, analysts have pointed to Argentina as one of those places where crypto adoption is at a gallop.

The South American nation’s crypto drive comes partly due to the high inflation that hit 47 percent last year and the history of its banks, which are known for their numerous restrictions that affect customers. All these have combined to make bitcoin hardly a hard sell for the majority of the population.

Weekly transaction volumes on LocalBitcoins in the country reached a record 9.4 million Argentine pesos in December 2018, and despite the crypto market meltdown, these numbers have continued to soar in 2019.

Local crypto companies have no doubt felt the full force of the market dip, but what is helping the situation is local demand for crypto (bitcoin).

Also in the mix is the push from a flood of Venezuelan immigrants that sees a growing number of underbanked users who need financial and remittance services.

Demand for crypto-related products and solutions has also been pushed by interest from local Argentinian brokerage firms and banks.

Local crypto exchange Bitex says these services are in high demand because firms want to offer their clients access to cross-border payments and remittances leveraging platforms like Bitex.

Bitex CMO Manuel Beaudroit recently revealed that the platform would look to lure more of these institutional customers by launching its bitcoin custody services solution in March this year.

Last week, the Buenos Aires-based startup played a crucial role in facilitating Paraguay’s purchase of pesticides and other agricultural products from Argentina.

Cryptocurrency mining is also beginning to boom in Argentina, with bitcoin mining firm Bitpatagonia bringing in 1,000 new miners after closing an investment deal earlier this month.

The mining firm’s co-founder Walter Salama also noted that a growing number of Latinos are looking at Argentina’s growing reputation as a hub to explore the global crypto ecosystem.

Another boost for bitcoin use in the region, and specifically in Argentina, has been the success of layer scaling solution Lightning Network.

And driving this adoption are local merchants, with local bitcoin wallet provider Muun COO Florencia Ravenna noting that to get people to spend bitcoin, firms “need to work with merchants.”

The Buenos Aires-based startup has plans to launch Lightning-enabled payments for its users in March.

Research into the use of the technology in one of Buenos Aires’ largest slums Barrio 31 shows that resident use bitcoin to pay for goods and services as well as for remittances.

Merchants in the district hedge against crypto volatility and problems of liquidity by adding markups on crypto payments.

Leveraging global networks

Local demand for bitcoin is in no doubt in Argentina, but it partly owes its surging numbers to local startups, which, for much of the bear market, have leveraged global networks to attract further interest.

Leading bitcoin firms around the globe had to go for employee lay-offs or restructuring as the crypto winter frost crashed businesses. However, as exemplified by Signatura, an Argentina-based digital notary startup, operating small and looking for international investors can work.

Signatura has reportedly been operating with just $450k in venture capital but has grown to have a customer base of 3,000 monthly users. Five percent of these users pay in bitcoin.

Crypto entrepreneurs have mastered the art of remote fundraising to attract investments from Silicon Valley, and other global sources and projects are developing solutions and services that suit the Argentinian market as well as the rest of Latin America.

For example, stablecoin startup MakerDAO partnered with several crypto exchanges- including Ripio- to roll out fiat on-ramps that allow unbanked stablecoin users to transact with any of the region’s fiat currencies.


Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

Leave A Reply

Your email address will not be published.