Globally, cryptocurrency adoption grew more than 880% at the end of the first half of 2021 compared to the same period last year, with cryptocurrency exchange platforms pushing this adoption in emerging markets, according to the results of the Global Cryptocurrency Adoption Index 2021 from the Chainalysis firm.
Interest in bitcoin is no exception in Latin America and Mexico. In 2016, electronic wallets for storing and trading bitcoin and other cryptocurrencies numbered in the thousands. Currently, the figures are around 20 million in the region and two million in Mexico on platforms for buying and selling cryptocurrencies such as Binance and Bitso.
It is enough to see the offers to buy and sell bitcoin to realize the losses that investors and fans of these cryptocurrencies could have if the price reached zero. On the LocalBitcoins site, the sale prices of bitcoin range from 40,000 pesos to almost two million pesos.
It is not fortuitous that in June the authorities in Mexico warned, in unison, that financial entities “are not authorized to carry out and offer to the public operations with virtual assets”, after Banco Azteca, owned by tycoon Ricardo Salinas Pliego, enthusiast of bitcoin, will launch the idea of accepting this cryptocurrency.
This blockade reduces, for the time being, the exposure of the Mexican financial system to bitcoin. However, the adoption of bitcoin among investors is growing at a rapid pace year by year along with the supply of assets.
Platforms for retail investors such as GBM + promote companies listed in the International Quotation System (SIC) that have exposure to bitcoin, such as Microstrategy. In addition, cryptocurrency buying and selling platforms incorporate more sophisticated products: instruments to invest in short, tokens associated with fiat currencies (stablecoins), leveraged positions, among others. One of the latest products to be announced by Binance was share-backed tokens, but they suspended their sale in July amid pressure from regulators.
Even investments with bitcoin include the real estate sector. In Jalisco, the company Agora Desarrollos promoted the sale of an apartment with bitcoin on its social networks.
“We see that the network is getting bigger. There are more and more users, more services and companies around bitcoin that somehow facilitate access to cryptocurrencies, their exchange and their spending, ”says David Yao, Binance’s director of operations in Mexico.
Despite this greater adoption in bitcoin, Gonzali estimates that a collapse in the price of this cryptocurrency in Mexico would be limited to retail investors and those engaged in mining.
This scenario may not be the same in countries in the region such as Argentina and Venezuela, where bitcoin adoption is among the highest in South America, according to the Chainalysis index. Or El Salvador, where the government of Nayib Bukele is about to adopt bitcoin as legal tender.
“Mexico is a country where these technologies are becoming known. For buying it, in Argentina and Venezuela it is much more mainstream. The reason is that people are looking for an alternative where to save that does not lose value, ”says Yao.
Both Gonzali and Yao see it unlikely that a catastrophic scenario will materialize, since there is an incentive for its permanence: the payment of taxes for the transaction of these cryptocurrencies for fiat currency. “It is a very low possibility and it has been reduced more and more,” says Yao.
However, the price of bitcoin is about to feel the pressure of new regulations in more countries and the increase in the cost of money as the global economy recovers.