Kaiko's Report: Latin American Users Prefer Stablecoins Over Bitcoin

By Karin Interfector
Published in News
June 25, 2024
2 min read
Kaiko's Report: Latin American Users Prefer Stablecoins Over Bitcoin

Kaiko Research, a platform providing insights and analysis on the crypto market, has revealed that Latin American users favor stablecoins over Bitcoin. According to their report, 40% of the region’s crypto trading involves USDT.

It’s no surprise that many people are drawn to Tether, the most highly capitalized stablecoin. These low-volatility assets provide reassurance, being pegged 1:1 to the US dollar. This preference is even more pronounced due to monetary instability.

“The biggest regional trend has been the rise of Brazil. The BRL today dominates crypto trading, with a market share of 53% versus the Mexican Peso, the Argentinian Peso, and the Colombian Peso. While BRL has lost some share to MXN since 2023 it has remained the most popular regional currency since 2021”.

To delve deeper into stablecoins, we suggest checking out this post.

According to Kaiko’s study, seven crypto exchanges offer trading pairs with fiat currencies from Latin America. These exchanges include Binance, Kucoin, Bitso, Mercado Bitcoin, Htx, Okx, and Bitfinex. Binance is the most popular, especially in countries like Venezuela and Argentina.

The firm’s researchers corroborate a Chainalysis study published a few years ago, which established that the pro-USDT trend began in 2021. According to Kaiko’s analysis, 40% of Latin American crypto trading involves the largest stablecoin in the market. Furthermore, almost half of the transactions involving the Brazilian real also include stablecoins.

Stablecoins dominated trading on three of the seven exchanges highlighted in the publication. Bitcoin’s trading volume only surpassed stablecoins on Mercado Bitcoin, a popular Brazilian exchange.

If you’re curious about crypto adoption in Latin America, we encourage you to read our post.

Kaiko’s report unveils interesting findings: trading pairs involving stablecoins and fiat currencies accounted for 63% of the trading volume among the top ten pairs.

“One positive signal from the region is that between January and May 2024, LATAM volumes grew at a faster pace than USD markets, which shrunk by a few percentage points relative to January. While the Argentinian Peso (ARS) is the lowest volume LATAM currency in nominal value, it increased by more than 400% year-to-date. The ARS was boosted by surging inflation and currency depreciation.

While inflation has retreated in Brazil and Mexico, it exceeds 200% in Argentina. Political uncertainty in the region has also risen, contributing to increased FX volatility. In late 2023, Argentina elected the far-right libertarian Javier Milei, who promised drastic reforms and budget cuts. In June, Mexico elected its first female president, who secured a larger than-expected majority, clearing the way for constitutional changes”.

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