Bitcoin critics try to attack the cryptocurrency from all angles, but one thing no one can deny is that BTC has now completely captured the attention of the masses. According to figures in local reports, there are already more than twice as many people invested in bitcoin as those who trade stocks in Latin America’s largest economy, Brazil.
Bitcoin > Stocks
The number of bitcoin investors in Brazil has already surpassed the total number of individuals registered on the São Paulo Stock Exchange (Brasil Bolsa Balcão S.A. or B3). The country’s three biggest bitcoin exchanges – which process about 95% of all cryptocurrency transactions in Brazil – had 1.4 million registered clients in December 2017. This number is more than twice the 619,000 registered individuals in B3 at the end of last year, reports Brazil’s largest media conglomerate Globo. There may also be more Brazilian bitcoin traders who use foreign exchanges or only trade offline.
The cause of this popularity, according to the owners of these exchanges, is the massive price rally last year. “The variable that explains this is the price of bitcoin,” said Rodrigo Batista, CEO of Mercado Bitcoin (Bitcoin Market), which reached 750,000 customers in 2017, a jump of 275% in comparison to the previous year. For André Horta of Bitcoin to You, which serves 300,000 people, the fall in the profitability of other investments was another factor that attracted investors to bitcoin.
Exchanges Can’t Keep Up with Demand
The flood of investors attracted by bitcoin brought significant growth to Brazilian exchanges, which similarly to venues all over the world greatly hampered their ability to cope with normal client service. At Mercado Bitcoin, for example, there are now 5,000 new registrations per day. A year ago, it was a maximum of 500. The result of this was an explosion in the number of complaints against the companies, according to the report.
To handle the number of investors, who are growing at almost 3.5 times from year to year, exchanges have had to strengthen their IT systems and hire more staff. Bitcoin to You has quadrupled its staff to 40 people.
With 350,000 registrations, São Paulo-based Foxbit had to suspend service to new investors in mid-December. “From one day to the next, the daily volume has gone up five times and we have not been able to meet this demand,” said Guto Schiavon, founding partner of Foxbit. From 40 people in November, the company’s staff rose to 60, and another 15 people were hired in January when the company reopened to the public.
What other factors can explain the popularity of bitcoin in Brazil? Tell us what you think in the comments section below.
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