Brazil’s largest crypto exchange, Mercado Bitcoin, has already traded $5 billion in the first quarter of 2021 alone compared to $1.2 billion in all of 2020.
Gustavo Filgueiras, a 25-year-old businessman in Brazil, began trading cryptocurrencies in 2019 after seeing an acquaintance’s crypto investment portfolio.
“I like high-risk investments because they usually result in higher profits. As a consequence, crypto caught my eye,” Filgueiras said.
Filgueiras knows 15 or so crypto investors in Brazil, the majority of whom are day traders looking for quick gains. A few use crypto for savings or as a store of value, he said.
Crypto is booming in Brazil, fueled by day traders like Filgueiras and his colleagues eager to take advantage of the ongoing bull market. Regulators, however, have yet to catch up. Save for a few tax requirements, Brazil’s crypto industry remains largely unregulated.
Brazil’s largest bitcoin (BTC, +3.64%) exchange reported record trading volumes in the first quarter of 2021. Locals say they’re interested in making a profit off the asset class. This is part of a larger regional trend: Other South American countries like Colombia and Argentina are seeing an explosion of interest in crypto as retail traders take advantage of crypto as an investment, remittance tool or store of value.
Brazil, the largest economy in Latin America, is struggling to contain the COVID-19 outbreak. It is one of the countries hit hardest by the pandemic, trailing the U.S. and India. The country’s president, Jair Bolsonaro, is facing a criminal investigation for his controversial response to the pandemic. The economy is at risk of not recovering quickly from the recession that followed the first wave of the pandemic, while experts predict a spike in the inflation rate.