From the Hyobi blog.
Huobi Group CFO
Mention Argentina and one may think of its sultry tango dance, or the renowned steaks from its parilla restaurants. But these days, South America’s second-largest economy stands out for its affinity with cryptocurrencies, which continues to burn red-hot even in the depths of the current crypto winter.
Recent data from global hiring platform Deel shows that many remote workers in Latin America still choose to be paid in cryptocurrencies, despite the crypto market crash. Argentina has a higher proportion of workers getting paid in digital tokens than anywhere else.
This preference becomes clearer in the context of Argentina’s economic backdrop. Many Argentinians choose to be paid in cryptocurrencies to circumvent exchange controls, and to mitigate soaring inflation which runs above 50% annually. A study by Wunderman Thompson found that two-thirds of Argentinians invest in cryptocurrencies to protect their savings, given the country’s multiple currency crises and sky-high inflation.
After Argentina’s economy minister Martin Guzman resigned amid an economic crisis last month, major crypto exchanges in the country reported that local users’ purchases of stablecoins went up two- to three-fold – a sign that consumers were using tokens such as DAI and Tether to hedge against a potential devaluation of the Argentine Peso.
Correlation between crypto adoption and inflation
The enduring appeal of cryptocurrencies is evident not just in Argentina, but also many other developing economies in the rest of Latin America as well as EMEA. It is no coincidence that some of the countries with the highest rates of crypto adoption also have some of the world’s highest inflation rates.
In April, CoinMarketCap released a list of high-inflation countries which also top the world rankings in crypto usage, pointing to a “clear positive correlation” between inflation and crypto adoption. Top of the list was Venezuela, whose inflation stood at a whopping 472%, and where 10% of the population use cryptocurrencies mainly for remittances and P2P transfers.
Others on the list comprise developing economies in Latin America and EMEA, such as Brazil, Colombia, Nigeria, and Ghana. Unsurprisingly, they are also among the top 20 countries in the Chainalysis 2021 Global Crypto Adoption Index.
Developing economies powering Huobi Global’s growth
Huobi Global’s business results corroborate these findings. As a leading global crypto exchange, our user base stands in the tens of millions across more than 160 countries and territories. More than half of our users are from developing countries, which are among our fastest-growing markets. Our user numbers there surged about 50% in Q2 compared with Q1, while trading volume and fees jumped about 30% in the same period.
In general, we see the following characteristics shared by many of our developing markets: large, youthful populations where there is a significant unbanked segment, rising Internet penetration in tandem with growing digitalization, and relatively crypto-friendly regulations. We believe users in developing countries continue to be drawn to crypto trading as it offers an alternative to traditional investments and remittances, with a lower entry threshold which makes digital assets more accessible.
How Huobi Global is seizing the developing markets opportunity
Looking ahead, we remain bullish on our prospects in developing markets and expect them to continue to be the growth engine of our global expansion. Huobi Global intends to meet this growing appetite for alternative financial services through blockchain technology, so that more users can trade with our proven security, liquidity, and stability.
What Huobi Global brings to users there is not just our wide range of offerings, highly competitive fees and robust 24/7 customer support. For the many users who view cryptocurrencies as a critical lifeline, our industry-leading capabilities and track record in security can offer invaluable peace of mind that their assets are secure.
While the crypto industry has yet to shake off the chill of its winter, there’s no question that many developing markets remain hotspots when it comes to the purchase and trading of digital assets – a trend that looks set to continue. This goes to show that even the darkest days can be punctuated by rays of hope, if you know where to look.
This article came directly from the Hyobi Global blog, found on https://blog.huobi.com/developing-economies-remain-hotspots-in-crypto-winter/