Brazilian investors are showing a strong preference for cryptocurrency products, even as the global market is going through a highly turbulent phase and there are no clear signs that uncertainty will end. Indeed, investors are relying on the industry to overturn well-established traditional financial investment products such as stocks and precious metals.
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Data from a survey published in November shows that 33% of Brazilian respondents plan to purchase cryptocurrencies like Bitcoin (BTC) in the next 12 months. Cryptocurrencies are in the first place, followed by real estate with a share of 26% and stocks with a share of 22%. While credit cards are in the fourth place with a share of 21%, savings accounts are in the fifth place with 15%.
On the other hand, among the financial products in use in 2022, cryptocurrencies rank fourth with a share of 26%. Digital assets tracking account (73%), credit card (72%) and savings account (55%). Specifically, the survey was conducted between October 1, 2021 and September 22, 2022 and attracted 2,024 respondents aged 18 to 64.
Drivers of crypto adoption in Brazil
Brazilians’ intention to invest in cryptocurrencies can be attributed to factors such as the effects of the ongoing economic turmoil. As cryptocurrencies emerged as a hedge for investors seeking to protect their wealth and profits from arbitrage in a highly unstable economy, Brazil was hit by a cocktail of high inflation and local currency devaluation.
At the same time, a significant portion of the population lives below the poverty line, with access to mobile banking platforms that provide easier access to digital assets. Indeed, the penetration of smartphones is considered an important factor for crypto adoption.
Overall, the growth of cryptocurrencies has opened up financial inclusion for the masses, offering citizens a more accessible way to save, spend and protect the value of their money. Cryptocurrencies also cater to the needs of crypto enthusiasts who see different assets as a means of financial freedom.
Elsewhere, with the growing demand for retail cryptocurrencies in Brazil, different innovations in the industry are providing residents with a smoother banking experience. Indeed, with the existence of neobanks, users can easily buy, hold and sell cryptocurrencies. The development can be attributed to the young population of the country; many choose to invest in cryptocurrencies, which helps make the industry an efficient and sound investment and payment option.
Additionally, there is an influx of cryptocurrencies targeting the growing Brazilian market. For example, several cryptocurrency exchanges such as Binance have previously stated that Brazil is a critical strategic market with enormous potential. Similarly, Coinbase has plans to create an engineering center in Brazil.
Disclaimer: The content on this site should not be considered as investment advice. Investment is speculative. When investing, your capital is at risk.