Interest in Bitcoin is surging in Latin America in a new era marked by strained relations with the US President Donald Trump.
The new US presidential administration has seen international controversy and strained relations with some countries during its first days. Latin American countries are seeking technologies that can relieve some economic pressure caused by a potential trade war.
Argentina, Brazil and Mexico have all seen steady growth in Bitcoin trading across the LocalBitcoins peer-to-peer trading platform. In Chile, Colombia and poverty-stricken Venezuela, increase in local trading volume has been even more dramatic.
Mexico Bitcoin meetup tops 150 attendees
As the country most directly affected by anti-trade policies promoted by the Trump administration, Mexico saw a sharp rise in cryptocurrency interest in January, resulting in a record turnout for that month’s Bitcoin meetup. Pablo Prieto, director of student life at the EBC Business school, recounts how the meetup saw over 400 signups:
“Our latest Bitcoin meetup was a powerful statement showing that people are turning to these type of technologies and currencies in the times where we face economic and political uncertainties. For over a year now, at the EBC Business School, we have been fostering with Bitso, the CDMX Bitcoin community. This last edition (no.5) has been the largest with over 150 attendees and 400-plus signups.”
This new high in meetup attendees, rather than simply the continuation of slow and steady growth, represents a significant spike in interest, according to Prieto:
“Yes, the last meetup we held was in October and we had 248 Signups and 78 registered attendees, so that’s double the number of attendees.”
More significantly, according to Bitso’s CEO and founder Pablo Gonzalez, the growth in meetup attendees was comprised mainly of non-technical people coming to Bitcoin for the first time:
“What's very interesting about yesterday's meeting is that over half of the attendees are newcomers to Bitcoin that came in to learn more and get involved. The community is growing, it's an exciting time for Bitcoin in Mexico!”
Carlos Ricon of Bitcoin market tracker CoinMonitor has also observed a large increase in traffic on the Mexican version of the site since January of 2016:
“And in the site coinmonitor.com.mx, the visits increased by 110 percent in the same period. The Mexico community is also strong -7K members- but not as strong as the Argentinian community.”
Argentina: South American Bitcoin mecca
While Mexico’s Bitcoin community growth remains noteworthy, Argentina’s is even more impressive. Buenos Aires Bitcoin Center co-founder Franco Amati has seen a growing interest in buying the cryptocurrency:
“We are seeing increased activity in our email accounts asking for basic questions like where to buy or how to learn more about it. The same is happening in the local community Facebook group, which now has more than 13,300 members, with people openly asking for buyers and sellers.”
Amati points out that the rising Argentinian demand for Bitcoin is reflected in the markets, where the local price is noticeably higher than the global value:
“What is interesting is that local market price in latest months is higher when compared with foreign ones: approximately Bitstamp plus 3 percent, and sometimes it reaches Bitstamp plus 6 percent. And I do not mean in LocalBitcoins where the price was always a bit high, but also on registered exchanges. CoinMonitor follows local prices and shows this situation, and people are starting to use it to know where to exchange.”
Ricon also sees Bitcoin’s popularity rising in Argentina:
“I think one of the reasons is because there is a very strong community that continues to grow. The Argentinian Bitcoin group on Facebook already has + 13K members. From our site coinmonitor.info we’ve seen an 180 percent increase in the number of visits compared to January 2016.”
Bitcoin a solution to remittance and import tariffs
Interest in Bitcoin as an alternative wealth storage and transfer method increases as US policy towards Latin America causes economic ripples. Following a statement by President Donald Trump proposing a 20 percent tariff on imports from Mexico to pay for a massive border wall, shares in Western Union, the cross-border remittance service popular with migrant workers, plummeted. The Mexican peso also plunged over one percent against the US dollar.
As it is not directly tied to any government policy, Bitcoin’s value is much less likely to be negatively affected by uncertainty, and in fact, has become a gold-like hedge against troubling times. Since Jan. 11, Bitcoin has risen against the Mexican peso from just over 17,000 per coin to almost 20,000, making Bitcoin holders better off than their countrymen who held only government currency.
Remittances from migrant workers in the US, many of them undocumented and without proper legal paperwork and recourse, are set to be a prime target of government policy over the next four years. Bitcoin’s borderless nature, however, makes cross-border wealth transfer very difficult to pin down and stop, especially since options like peer-to-peer cash-for-crypto service Wall of Coins allow for seamless private Bitcoin-to-cash transfers as a remittance service.