Despite the everyday challenges that emerging markets face, they have still managed to embrace crypto for different activities. Unlike the west, such as North America that uses crypto mainly for speculative purposes, emerging markets have a different ball game.
Many residents from emerging markets such as Venezuela have no faith in their governments and systems. This is the primary reason why they are pushed to seek alternatives to ensure their safety. Their economies are on edge, and crypto might be the only option you would use to secure your future. That explains why there are a spike in BTC (Bitcoin) markets in both Latin America and the Middle East. The political climate has pushed them to seek other options.
Even though there is an option to get a job and secure a pension fund, the pension funds system is broken in most places, such as Brazil. This has made many millennials turn to BTC (Bitcoin) as a pension fund. Why? It is safe from inflation and varying economic and political influences.
Some of the ways they are approaching crypto include:
Crypto is embraced with both local and international remittances. Gone are the days where people solely relied on Western Union or MoneyGram to send money. In some countries such as Cuba, Western Union completely closed its operations. They were forced to explore other options such as BTC (Bitcoin). Many users from emerging markets such as Nigeria have embraced crypto to send remittances since it is more convenient and cheaper. The method involves few intermediaries. Also, it tends to have lower fees comparatively, making it a better option.
Even though remittances are on the rise, many exchanges are still not regulated and trustworthy in many places, such as Cuba, due to US sanctions. This opened doors to P2P trading and WhatsApp groups for trading since it is a mobile-only market.
With the high volatility in the crypto ecosystem, it is an excellent chance to earn from that, and emerging markets have taken advantage of that. There are many active participants from Brazil, Cuba, and Nigeria, among many others. Some countries face exchanges because of their government laws, such as Cuba. But there are still traders in those countries as they hide their VPN if they need to trade.
The trading does not have to be on the primary exchange platforms such as Coinbase. There is an increasing number of Paxful, Binance, and LocalBitcoins that have also incorporated P2P markets. In Brazil, there are more than $25.3 million P2P BTC (Bitcoin) trades in 2020 alone.
Many local crypto exchanges growing, such as BuyCoins from Nigeria, grew from $5 million per month to $21 million in a year.
Many residents from emerging markets have embraced crypto for online shopping. Many love the idea that it is anonymous and convenient. It is also safer as their account details will not be at stake due to the nature of crypt transactions.
Contrary to expectations, crypto has also been used in conducting legal business.
Source of income
There are gaming enthusiasts that use crypto for their gaming activities. Poker is so standard everywhere, and many are making a killing from it, thanks to crypto.
There has been tremendous growth in emerging markets due to crypto. Many have turned it into a haven from the pandemic to shield them from the harsh economic times and uncertainty.