Is the high inflation rate of 9.6 percent the reason people are turning to Bitcoin in Brazil?
The simple answer is no.
Recent statistics and infographics published by global bitcoin payment processor BitPay revealed that the volume of bitcoin transactions in Latin America has increased by 120 percent, and almost doubled in quarterly transactions. Many analysts suspected that the high inflation rate and unstable economy of Argentina and Brazil have caused a surge of growth in Latin America’s bitcoin industry.
While this may be true for Argentina, a country where the majority of the population is willing to pay 20 percent above international rates to obtain U.S. dollars and suffer from annual inflation rate which currently stands at 28.2 percent, the increase of inflation rate and bitcoin growth in Brazil is entirely coincidental, says Daniel Novy, the founder of Brazil’s largest bitcoin exchange, BaseBit.
“When inflation is high, everyone buys government bonds,” Novy told Bitcoin Magazine. “They are offering about 14 percent a year. It’s a very good deal comparable to the