It has become crystal clear that Bitcoin can offer a viable alternative to bank-issued fiat currencies, especially in countries where tight capital controls are part of daily life. Brazil is one of the places where Bitcoin adoption really seems to be thriving and recent trade volume statistics paints a picture of a thousand words.
Bitcoin Trading Volume Nearly Doubling in One Quarter
Brazil is home to several Bitcoin exchanges, of which Mercado Bitcoin, Foxbit, BitcoinToYou and flowBTC are the best-known names in the business. LocalBitcoins is also available in the Brazil region but is attracting the third-lowest trading volume of all eight exchanges located on the chart provided by BitValor.
Similar to what we see on Bitcoin exchanges in the Western World, keeping trading fees as low as possible is a great way to attract new customers. Even though Mercado Bitcoin has the highest Bitcoin trade fee (1%), they are still the second player in the Brazilian Bitcoin exchange market. Most of this success can be attributed to a larger variety of deposit and withdrawal methods for fiat currency, compared to other Bitcoin exchanges.
Despite having so many Bitcoin exchanges operating in Brazil already, there is still a lot of room for competitors to rise and stake their claim. More competition brings trading fees down, which is beneficial to all Bitcoin users in the nation. Even Basebit, with it’s 0.10% market share, could become a major player in the Bitcoin exchange business in Brazil in due time.
Some of our readers might be wondering where this surge in Bitcoin awareness is coming from. Mainstream media is often responsible for negative Bitcoin news and Brazil is no exception to this rule. However, that is not keeping merchants from experimenting with Bitcoin payments, as the low transaction fees and flexible international exchange rates are a big bonus.
“The problem we have in Brazil is that the only news headlines that becomes mainstream are the bad ones. Bitcoin has a bad reputation here, but anyway the merchants are definitely being more open to it.” – Basebit founder Daniel Novy stated.
Capital Controls Help Bitcoin Growth
It will take many years until government officials come to terms with what Bitcoin has to offer and how it could help them run a country. For now, most governments are stuck in their old ways and enforcing capital controls upon an underbanked nation is not a smart decision.
Both Brazil and Argentina are in the same boat regarding capital controls and a broken financial structure. Local residents want to move funds in and out of their countries without having to go through tedious processes or having to pay ridiculous fees. Bitcoin offers a solution to both of these problems, at little or no cost.
With over R$ 9m being traded across eight Bitcoin exchanges, virtual currency has become a part of everyday life in Brazil. Even though this integration may still be localized in most areas, Bitcoin is growing in South America. Only time will tell whether or not this trend will continue, or if it’s just a temporary flash in the pan.
Images courtesy of Shutterstock, Mercado Bitcoin