Binance’s users increases due to inflation

Maximiliano Hinz, top executive of Binance Latin America, cited that spiking inflation is the key reason why this world’s largest cryptocurrency exchange has attracted more new customers in recent months. Another factor is that the historically strong dollar has weakened other fiat currencies from emerging markets.

Latin Americans flock to cryptocurrencies due to inflation

In a recent interview, Hinz said that Binance’s growing customer base is mainly coming from Users of Latin American descent. The main reasons are skyrocketing inflation and monetary predicament in that region:

“Now that we are seeing inflation ramping up worldwide, we are seeing that more and more people are seeking cryptocurrency, like bitcoin, as a way to protect themselves from inflation.”

Residents in Argentina, Brazil, and Mexico make up the majority of Binance’s new customers due to rising inflation in these countries. Hinz cites Argentina as a prime example.

The annual inflation rate surpasses 90%, while political chaos, unemployment and poverty occur across the country. It’s no surprise, then, that most Argentines become new customers of Binance. Residents of Brazil and Mexico (poor economic conditions) also ranked shortly after.

Numerous studies have estimated that cryptocurrency adoption increases in countries where the majority of the population is not wealthy and lacks basic access to financial services. Many people believe that due to the limited supply of BTC of only 21 million coins is the main reason to invest in it.

Moreover, the pace of production decreased about every four years after the Bitcoin Halving event. Thus, basic economic theory holds that when an asset is more scarce and the demand for that asset remains constant or increases over time, so does its dollar price.

Experts are in favor of investing in BTC

Over the past few years, many experts and celebrities have advised that investing in Bitcoin in the midst of an inflation crisis is a suitable strategy that can maintain one’s wealth. Good examples are MicroStrategy by Michael Saylor, Jordan Peterson, Barry Sternlicht, Paul Tudor Jones III, and many others.

Michael Saylor – Executive Chairman of MicroStrategy – has considered BTC the best financial instrument during a period of repeated increases in inflation. In 2021, he advised the people of Turkey (a country whose fiat currency depreciates and the economy closes) to convert their Liras into digital assets if they want to “thrive.”

Billionaire hedge fund manager Paul Tudor Jones is also a well-known BTC investor. He believes it is even superior to gold as a hedge against inflation.

The co-founder of Starwood Capital Group – Barry Sternlicht – has admitted to buying Bitcoin and Ether to protect himself from an adverse financial situation. Speaking of BTC, Barry Sternlicht explained that Bitcoin and Ether are decentralized and governments cannot interfere with those assets.