Experts note that Latin America pays for imports that arrive from Asia with cryptocurrencies. Bitcoin represents 63% of the total cryptocurrencies that Latin America trades.
The Asian continent sends the largest amount of Bitcoin that Latin America receives, according to the last report by the blockchain analysis firm Chainalysis. China, Japan, and South Korea have become the most important trading partners in the Latin American ecosystem.
Between July and June, East Asia sent more than USD 10 billion worth of cryptocurrencies to addresses in Latin American countries, according to data from Chainalysis. The Asian territory thus becomes the largest provider of Bitcoin and other cryptocurrencies for companies and users in Latin America.
Chinese owners and companies conduct most of their transactions with Latin America. Several Chinese traders, especially those who are dedicated to importing products, prefer to pay their Latin partners with Bitcoin and other digital assets. For that reason, a large part of the cryptocurrencies that enter the territory comes from the Asian market.
Even though the Latin American market is one of the smallest with which Asia interacts, its presence has grown thanks to traders on both continents, adds Chainalysis.
This has prompted several Asian exchanges to start providing their services in Latin America in recent months. In recent days, the South Korean exchange platform Bithumb announced that it would begin operations in Argentina, Mexico, and Brazil. Similarly, other renowned Asian brokerages such as Binance, OKEx, and OKCoin have decided to bet on the Latin American market.
Given that the majority of overseas Bitcoin transactions occur in China, Chainalysis researchers consider that Chinese users use cryptocurrencies to transfer their capital out of the domestic market without state supervision.
Latin Americans Prefer Bitcoin to Other Cryptocurrencies
In Latin America, Bitcoin continues to be the main cryptocurrency, according to the said report. Chainalysis states that Latin Americans typically trade more Bitcoin than other cryptocurrencies since this is the region’s preferred asset. Around 63% of the volume of cryptocurrency transactions conducted by Latin Americans occurs on the Bitcoin network, according to a graph from the research.
Latin America is the fourth territory with the largest presence of Bitcoin in its market worldwide. North America, Africa, and Eastern Europe surpass it by few digits. This coincides with the growth that the local market has achieved in the last twelve months. It has managed to mobilize around USD 42 million by the end of July, just on Localbitcoins.
Latin America is more interested in Bitcoin than in altcoins like Ether, Dash, Monero, and Zcash. The trading volume of altcoins is only 11% of the total market. Even stablecoins like Tether and Dai, which comprise 26% of this market, outperform them.
The Latin American cryptocurrency market has matured over the years and forecasts are very encouraging. According to the Spanish firm Ametic, the growth of this market will rebound in the next three years. There have even been discussions that investment in the blockchain sector will be above USD 200 million in 2023.
By Alexander Salazar
