Binance Research: Investment Strategies and Motivations of Crypto Investors in Latin America
Date: 2024-08-02 Author: Henry Casey Categories: BUSINESS
Binance has conducted a large-scale study involving 10,000 users from Argentina, Brazil, Colombia, and Mexico. The results show that cryptocurrencies are becoming an important element of long-term financial strategies for residents of the region. In this article, we will review the main findings of the study and discuss the reasons why Latin Americans invest in crypto assets.
According to the study, 50.3% of respondents prefer to use crypto assets for long-term savings. These investors view crypto assets as a way to preserve capital and protect their savings from inflation and devaluation of national currencies.
At the same time, 18.8% of respondents said that they trade crypto assets on a daily basis. This group of users actively uses market volatility to make a profit in the short term.
Everyday Use of Cryptocurrency
The study also found that 8.4% of users make P2P transactions, while 8.2% use decentralized finance (DeFi) applications. These data indicate the growing popularity of decentralized technologies and services in the region.
It is interesting to note that only 4.9% of respondents pay for goods and services with cryptocurrency. This shows that despite the growing adoption of cryptocurrency, its use as a means of payment remains limited.
Cryptocurrency is also used for remittances, but only 3.4% of respondents admitted to using cryptocurrency for this purpose. This may be due to the high level of competition from traditional money transfer services.
It is also worth noting that 4.8% of Latin Americans buy non-fungible tokens (NFTs). This market segment continues to grow, attracting more users interested in digital collectibles and art.
Motives for investing in cryptocurrency
Binance analysts have found out the main reasons why Latin American residents invest in cryptocurrency. The largest number of respondents (20.3%) cited the high returns of crypto assets as their main motive. Another 15.2% of investors believe that crypto assets can help them achieve financial freedom.
Other reasons for buying crypto assets included protecting savings from inflation and devaluation, investing in innovation, diversifying an investment portfolio, and privacy. These factors indicate a wide range of opportunities that cryptocurrency provides to users in the region.
Guilherme Nazar, Regional Vice President of Latin America at Binance, said:
“Latin America is a very important region for Binance. We expect the number of cryptocurrency users to grow significantly here, given the specific needs of users in each country.”
This comment highlights the strategic importance of the region for the world's largest crypto exchange and its readiness to meet the growing demand for cryptocurrency among local users.
Leaders in Cryptocurrency Adoption
According to a study conducted by crypto exchange Gemini two years ago, Latin America is leading the way in terms of crypto investor growth. Cryptocurrency adoption is particularly rapid in Brazil. Uphold CEO JP Thieriot previously suggested that Latin American countries will be leaders in Bitcoin adoption due to the large number of people without access to banking services.
A Binance study shows that cryptocurrencies are becoming an important financial planning tool for many in Latin America. High yields, inflation protection, and diversification opportunities make crypto assets attractive to long-term investors. At the same time, interest in daily trading and the use of decentralized financial applications is growing. Together, these trends point to significant growth potential for the crypto market in the region.
