Brazil may have opened the doors for Bitcoin (BTC), as Bitcoin’s year-to-date performance compared to the Brazilian Real coupled with the country’s financial distress.
On May 11, it has been reported by Delphi Digital titled “The State of Bitcoin” that Brazil’s central bank lowering its interest rates to 3% and the fact the Real had lost 30% of its value relative to the US dollar could drive away investors “who find the risk-reward tradeoff no longer attractive” in certain local markets.
However, Delphi Digital thought that this potential exodus could lead to a greater push towards Bitcoin (BTC) in Brazil.
Delphi Digital stated:
“This is not to say that capital flooding out of emerging markets will flow right into bitcoin… but the sheer size of this potential move could serve as another demand source for BTC, especially if tighter capital controls become more commonplace.”
It has been analyzed that BTC had the best YTD performance compared to the Real — 74%, far exceptional that of the US dollar, coming at 21.9%.
Brazil’s economy might be well positioned for Bitcoin investors fleeing other sectors of a risky market https://t.co/Wnyx0Fkdob — Cointelegraph (@Cointelegraph) May 12, 2020
Though the country’s Bitcoin market might be getting riper for investors, cryptocurrencies in Brazil have had their share of regulatory challenges and influential critics, as four companies focused on Bitcoin trading have closed since 2019.
Thus, Murillo Portugal, the President of the Brazilian Banking Federation has argued that cryptocurrencies are not really currencies at all.