All correlations between Bitcoin and gold aside, cryptocurrency is gaining a lot of popularity in Brazil all of a sudden. In fact, it appears as if the trading of Bitcoin has surpassed the gold volume in the country. This is quite an interesting statistic, given the financial woes plaguing Brazil right now. At the same time, this is another vote of confidence for the Bitcoin ecosystem.
Looking at the charts for the first six months of 2016, it is clear to see Bitcoin trading surpassed gold in Brazil. To put this into numbers, Bitcoin trades reached a volume of R$ 164m, whereas spot gold contracts “only” attributed to R$153m. Putting this into USD values shows us there is a US$3m difference between both markets.
Brazil Warms up To Bitcoin Trading
This trend got stronger as the year 2016 progressed, with Bitcoin trading reaching twice the value of gold trading in that month.But what is driving Brazilian customers and investors to Bitcoin all of a sudden? Gold is an excellent store of value, and its value appreciates over time due to scarcity.
Bitcoin is gaining in popularity all over the world, and Brazil is no exception to this trend. BitValor, a website tracking the Bitcoin trading volume in the whole country, there is a significant trading volume increase compared to all of 2015. Albeit 2015 was successful, exchanges had reported a R$113m trading volume over the course of twelve months. The year 2016 is a 45% increase in numbers, and we are only halfway the 12-month period. Moreover, the first semester of 2016 saw a Bitcoin trading volume equal to the previous three years combined across all Brazilian exchanges.
While these numbers are still small compared to the rest of the world, it goes to show developing countries are keen on Bitcoin. Bitcoin is designed to make an impact in regions where financial access is very limited. Brazil, together with a lot of other countries, can reap the benefits offered by Bitcoin.
Despite these strong numbers in Brazil, gold remains an asset with higher trading volumes compared to Bitcoin. The London Bullion Markets Association reports how there is an average daily trading volume in gold of US$20bn. Bitcoin, while only seven years old, sees an average daily volume of US$1.5bn. This is quite significant for the cryptocurrency, though, as it has often been referred to as “fake internet money”.
For the time being, it is unknown as to where this sudden interest in Bitcoin trading is coming from. Brazilian traders may show a new appreciation for cryptocurrency all of a sudden; that is certainly possible. But residents are seeing trouble brewing on the horizon as well. Bitcoin is a solid way to diversify a portfolio; that much is impossible to deny.
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