The crypto winter isn’t scaring companies away from Latin America, a region friendly to digital assets.
Bitcoin is down more than 50 percent this year so far, trading near a critical US$20,000 level. However, companies are looking to expand or open operations in a region known for its unstable economies and high inflation. Among them are cryptocurrency exchange OSL, a member of Hong Kong-listed BC Technology Group, investment bank BTG Pactual and Banza, a new fintech company launched by AdCap in Buenos Aires.
“The bear market is just beginning and may be on the top for six months or a year, but beyond” there is still interest in crypto, Fernando Martínez, OSL’s managing director and head of Americas, said.
According to Martínez, OSL plans to increase employees by 40 percent in Latin America, where it expects to have a total of 56 employees by year-end.
Banza, which plans to double its headcount to 72 employees in the region this year, is raising money to open new offices in Mexico and Colombia in the first quarter of 2023 and will do the same in Peru later next year.
“This is circumstantial and the downward cycle is going to reverse. Today it can be an obstacle, but cryptocurrencies are here to stay and the number of people left to join is enormous,” Pablo Juanes Roig, co-founder and CEO of Banza, said.
Meanwhile, Latin America’s largest investment bank, BTG Pactual, plans to launch a cryptocurrency investment platform for Bitcoin and Ether, called Mynt, in the coming months before rolling it out in other countries. This follows the bank’s launch of Empiricus Teva Criptomoedas Top 20, a crypto ETF that tracks 20 crypto assets through its Empiricus unit. Empiricus raised close to $15 million in seed money through its platform Vitreo, which has around 13 billions reais (US$2.5 billion) under custody.
Even companies that have struggled during the market rout plan to expand in the region. Argentina-based Decrypto.la is having difficulty getting funding but its CEO, Miguel Schweizer, said in an interview, the company will grow.
“We are still considering landings in Brazil or Mexico, but it was delayed due to troubles in this market context,” Schweizer said.
Mexico-based crypto exchange Bitso, which launched in Colombia in May and recently told CoinDesk it cut about 11 percent of its workforce of more than 700 people, said it plans to extend its activities outside of Mexico. Argentina’s high inflation and interest rates are good opportunities for our ventures, Bitso CEO Daniel Vogel said.
“People will think about how to protect themselves against inflation and that is why we launched our product of weekly returns in Bitcoin and USD stable coin,” Vogel said.
by Rachel Gamarski & Ignacio Olivera Doll, Bloomberg