Bitcoin adoption in Mexico was boosted by the 2020 pandemic but has declined.
According to Chainalysis, Mexico is #3 in Bitcoin adoption in Latin America.
The performance of the Mexican peso was one of the big surprises of 2023 after its price trended positively against the US dollar. A situation that is affecting the way users in this country use cryptocurrencies like Bitcoin (BTC).
The Mexican currency has appreciated 12% so far this year. The exchange rate ended June 16 this year at 17 units per dollar Data the Central Bank of Mexico (Banxico).
said price It is at its highest level since 2016. “If you look at the start of last year, the Mexican peso is the EM currency that has appreciated the most in the world, up almost 20%.” explained economic analyst Fernando Losada told CNN.
According to the expert, one of the reasons that explains the appreciation of the peso is the fact that Banxico has been raising interest rates faster and more aggressively after the end of the Covid pandemic.
Losada’s vision follows the same line as an analysis published by CriptoNoticias last March suggests Mexico kept its interest rate the same Unlike the US, the inflation rate during the pandemic is significantly higher than the local inflation rate.
They note that the rise in interest rates has reduced the incentive to borrow at bank rates and to invest in financial assets that appreciate with inflation. In addition, Losada points out that the Federal Reserve’s recent decision not to raise interest rates favorable for peripheral currencies like the Mexican.
Bitcoin adoption in Mexico is not the same as in the rest of the region
The appreciation of the peso contrasts with what is happening with the currencies of other Latin American countries, where the trend is mostly towards devaluation. This situation leads to some peculiarities in the introduction of bitcoin to the Aztec people, which do not exist in the rest of the region.
Mexican bitcoiner Lorena Ortiz spoke about these peculiarities, noting that the population is facing economic and financial problems in 2020 amid the pandemic looked for Bitcoin as an alternative.
Add that This search later changed as the Mexican peso appreciated in value and there were economic improvements.
In this regard, Mexican analyst Mauricio Di Bartolomeo highlights the increase in investments by US and Chinese companies, which contribute to currency appreciation and the country’s economic progress. Therewith Mexicans are now more motivated to maintain their weight.
This growth and the consequent appreciation of the peso makes the population larger do not have the same interest in using bitcoin as a safe havenas is happening in countries like Argentina, for example, amidst the high inflation it lives in.
Something Ortiz himself confirms. “We feel comfortable in Mexico to a certain extent. Why are we looking for a solution to a problem that isn’t terrible? So I don’t know if bitcoin adoption will really increase,” he said in an interview.
Banxico commented on the matter a few days ago, assuring that the Mexican public’s interest in Bitcoin and cryptocurrencies has waned. in the last semester.
Nevertheless, Mexico is the third largest country in Latin America with the highest acceptance of cryptocurrenciesto Brazil and Argentina, and ranks number 38 of the index presented by blockchain analysis company Chainalysis.
Ortiz noted that Mexicans’ interest in cryptocurrencies could point to other uses. Remember that there is a great need for options for sending transfersan activity that sees more and more tools being launched by the various cryptocurrency platforms operating in the country.
As this medium reports, the calculations of the Bitso exchange assume that this will be the case in 2022 over a billion dollars in cryptocurrency They were shipped to Mexico from the United States.
Also The use of Bitcoin as a means of payment is increasing. Such is the case of Grupo Salinas, one of the largest consortia of companies in Mexico, which recently started facilitating payments with BTC for phone, internet, and cable services.