Bitcoin (BTC) is experiencing a year-end frenzy and it’s not just because of its price. Good news is coming from all fronts: more institutional investments, companies incorporating the currency into their treasuries, politicians talking about national reserves with the digital asset or records in network processing power.
Without a doubt it is a year to frame in the history of bitcoin and of which will speak for a long time like a before and after. About this particular situation and the near future that would lie ahead for BTC, we spoke with Guilherme Nazar, regional vice president of Binance for Latin America. Nazar joined Binance in 2022 and also serves as the exchange’s general manager in Brazil.
His view on the ecosystem of digital assets is that bitcoin, and cryptocurrencies, are gaining new spaces on a global scale.
This even in spheres such as American politics or among companies the size of BlackRock. According to Nazar, “it is a positive sign for the digital asset market (in Latin America and in the world) that bitcoin and cryptocurrencies are mentioned more frequently and are becoming a significant topic of discussion.”
For the executive it is very significant that politicians and prominent industry leaders are explicitly stating their positions, recognizing the value of bitcoin in the monetary system and “making it clear that cryptocurrencies are important on their agenda.”
He adds: “This will probably mean more regulatory clarity, as governments need to make their position clear. This new scenario of public conversation increases the recognition of bitcoin as a legitimate financial instrument.”
Nazar considers that the approach of politicians is a good sign for bitcoin. Source: Courtesy Binance.
Institutional FOMO around bitcoin
Nazar believes that there are multiple factors that are influencing the increase in interest in bitcoin, which is reflected in its price. These elements are attributable, in his opinion, to a “combination of macroeconomic factors and financial innovation strategies, with the US elections as a significant factor behind this increase.”
And it’s no wonder. Donald Trump’s victory in the United States presidential elections is considered one of the major catalysts for BTC expansion into little or unexplored territories in the past. On this point the executive explained:
“From a macroeconomic point of view, the recent interest rate reduction in relevant economies, including the US, the euro zone and China, injected liquidity into capital markets, and the expectation of further cuts contributes to the positive investor sentiment with the recovery of the global economy.”
The above adds to the impact that the launch of bitcoin spot exchange-traded funds (ETFs) had in January in the United States, which expanded institutional participation in the market.
The ETFs were launched by the heavyweights financial companies BlackRock and Fidelity, along with nine other management companies, a fact reported by CriptoNoticias, which for Nazar captured strong interest and pushed bitcoin even further into conventional portfolios.
With the “formalization” of institutional investment in BTC, new floodgates opened from which large capital is flowing and, by extension, records for bitcoin.
Historical records demonstrate the impact of new developments on the ecosystem and reinforce the growing alignment of digital assets with global financial trends. It is Nazar’s point of view who considers that the future for the market is optimistic, “as the role of bitcoin in diversified portfolios continues to expand and gain more acceptance.”
“Unlocking the flow of capital is key to making digital assets mainstream. However, there has been a lack of traditional infrastructure for the private segment to gain exposure to cryptocurrencies,” says the vice president.
Regulation and adoption of bitcoin in Latin America
When asked about the future of regulations for bitcoin and cryptocurrencies on a global scale and adoption in Latin America, Nazer is one of those who believes that the industry has entered a phase of development and maturation where regulatory compliance is essential for the experience and user security, business success and responsible growth.
“Regulations play a significant role as they contribute to people’s trust, so that cryptocurrencies can become popular among the general public.”
Guilherme Nazar, regional vice president of Binance for Latin America
Regarding Latin America, he considers that the region is one of those that has higher growth potential for adoption. “Latin Americans are technology experts, they are open to trying innovations that help with their specific needs and they have demonstrated a thirst for tools that allow them to use cryptocurrencies in their daily lives,” he shared in his contact with CriptoNoticias.
Latin America is one of the regions in the world where the use of bitcoin and cryptocurrencies is growing the most. Source: Chainalysis.
This push would be led by the “young population who are eager to use faster, innovative and more accessible financial solutions, and cryptocurrencies offer that.”
Regarding the behavior of Latin American users, Nazer revealed metrics collected by Binance in which he highlights that one in two Cryptocurrency users (50.3%) in Latin America invest in digital assets looking for long-term savings and profits.
Furthermore, according to the exchange’s analysis, more than 90% of cryptocurrency investors in the region plan to increase their digital asset holdings in the next 12 months.
Even so, there are aspects to improve, according to Nazar “there are still many myths and misinformation about the crypto space that we need to debunk more and more. The Blockchain is a completely traceable environment, favoring the easy discovery of illicit activities.”
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