Cryptocurrencies grow in Brazil, but regulation remains a hurdle

Before crashing by around 70 percent in 2018, Bitcoin – the world’s most popular cryptocurrency – experienced an off-the-charts valorization, peaking at USD 20,000 in December 2017. The “Bitcoin frenzy” that took over the world also enveloped Brazil, as local exchanges observed a major rise in turnover and clients amounted to over 1.4 million people. The “cryptomarket” has pushed young middle-class men into quitting their jobs and dropping out of college, planning to get rich and retire within six months, thanks to Bitcoin.

There is no question that in Brazil, cryptocurrencies have found a positive environment in which to flourish.

Four exchanges take the largest chunk of the local market: Foxbit, Mercado Bitcoin, Negocie Coins, and Bitcointoyou. However, according to Ricardo Rochman, a professor at Fundação Getulio Vargas, a think tank, another 15 smaller exchanges complete the market, gathering around 3 million investor accounts. That doesn’t necessarily give an idea of how many individual people are investing, as one client can own more than one account.

Either way, there are more people trading cryptocurrency in Brazil than trading on São Paulo’s stock market, which has roughly 650,000 registered investors. Almost half of the records in the cryptocurrencies market are taken by Foxbit and Mercado Bitcoin. Annual turnovers of both companies have skyrocketed in 2017, reaching a total of BRL 8 billion.