A recent market report from Arcane Research, an analytics company, has informed a surge in Bitcoin trading across Brazil and Argentina. The development was likened to the economic 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 current Coronavirus pandemic, Turkey, Brazil, and Argentina recorded new records in weekly Bitcoin trading volume over the past two months. According to the market report from Arcane Research, Brazil witnessed a 169 percent increase, 20 percent in Argentina, and five percent in Turkey, in terms of fiat currency.
The surge in Bitcoin trading volume in these countries is evident that the cryptocurrency is somewhat considered as an instrument by the traders against the diminishing value of their fiat currency. More so, in Argentina, local currency regulations make it difficult for the traders to seek refuge in foreign currency like dollars or euros.
Consequently, this regulation probably has turned in favor of Bitcoin, as traders increasingly turn to the cryptocurrency as an instrument to hedge the nation’s devaluing currency. Last week, Argentina broke above $1 million in weekly Bitcoin trading volume, according to Useful Tulips. This was the first time Bitcoin traders in the country could reach that point.
Devaluing fiat currency
Argentina has been in economic crisis before the current Coronavirus pandemic, including Brazil. The pandemic worsened the whole situation in both countries, as their national currency continues to nose-dive in value. Reportedly, Brazil’s fiat currency dropped by over 30 percent against the US dollar.
Also, the interest rate fell to two percent per year, thereby excluding fixed-income instruments as an ideal investment option at the moment, in favor of stocks, funds, and cryptocurrency per se.