Meet Latin America’s first crypto unicorn and leader

  • Bitso is Latin America’s leading crypto exchange with over 4 million users in five countries.
  • In Latin America, the company hopes that crypto can help deal with high inflation and devalued currencies.
  • This article is part of “Master Your Crypto”, an Insider series that helps investors improve their cryptocurrency skills and knowledge.

El Salvador has rolled out a crypto wallet to the country’s 6.5 million citizens. The digital wallet is run in part by a Mexican startup called Bitso, whose name is a mix of bitcoin and peso. If you follow the advent of crypto in Latin America, Bitso is the startup to see.

Quantcast and Harvard Business School alumnus Daniel Vogel started the cryptocurrency exchange in 2014, long before the market crash in 2017, and this year, confidence in cryptocurrencies around the world has been rising.

After Bitso secured seven funding rounds totaling $ 314 million by mid-2021, its valuation exceeded $ 2 billion, cementing the company as Latin America’s first crypto unicorn, talking about a startup to cross the billion-dollar mark . It allows users to exchange various coins using pesos, among other features including international money transfers.


“There is no doubt that Bitso paved the way for much of the crypto ecosystem in Latin America, starting before traditional investors understood the potential of decentralized financing,” Claire Diaz told Insider. -Ortiz, a Latin American-focused angel investor at VC3.

While US Crypto is an asset, it is a must-have in Latin America

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A virtual currency announcement on March 17 in Buenos Aires, Argentina.

Ricardo Ceppi / Getty Images

Vogel sought to close a gap in Mexico’s banking system, citing a significant number of non-bank citizens with poor access to financial mechanisms such as money transfers.

Eight years later, Bitso is one of the only internationally regulated cryptocurrencies in Latin America that offers low-cost payment options – migrants’ ability to send digital currency home – and 35 cryptocurrencies to its 4 million users in Mexico, El Salvador, Brazil, Colombia and Argentina. .

The bottom three of these countries are among the top 20 crypto-adopters, according to a 2021 report from blockchain data firm Chainalysis.

While cryptocurrencies may be largely driven by ideology, Latin Americans may have immediate basic needs that digital currencies can help meet, as the BBC noted in April.

Take, for example, Argentina, whose past economic crises have caused citizens’ confidence in its financial institution to decline in recent decades. The country faces an annual inflation rate of 61%, Bloomberg reported. The latest US target was 9% by comparison – and it was a record thanks to supply chain problems and soaring oil prices.

Bitso moved to Argentina in 2020. In that market, Diaz-Ortiz said, if you work for a foreign company that deposits your salary in a local bank, your dollar will be converted into pesos to about 130 pesos per dollar instead of the free market value of 300 pesos or more per. dollars.
The crypto “is undoubtedly a smarter choice than the Argentine peso,” she added.

It is estimated that around 6 billion people worldwide have a bank account, according to a 2021 report from the World Bank.

Worldwide, at least 2 billion people do not have a bank account or do not have access to a complete package of banking tools, Diaz-Ortiz said, adding: “Most of these people live in countries with economic systems that are not similar to the United States. benefit from decentralized financing solutions. “

But crypto is probably not the ultimate solution, especially as adoption swells, government debt grows, and the industry remains riddled with fraud and theft.

The Latin American market is not immune to cryptocurrencies

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A Chivo sign in El Salvador.

Camilo Freedman / NurPhoto via Getty Images

Chivo, the name of El Salvador’s digital wallet and slang for “cool”, was intended to be an easy gateway to crypto for the country’s people and a significant step in the government’s experiment with a national digital currency.

But it has seen poor use from individuals and traders, hacking issues and technical issues.

61 percent of Salvadorans left the app after downloading and withdrawing the $ 30 sign-up bonus that came with it, according to an April report from the U.S. National Bureau of Economic Research.

And like any crypto player, Bitso faced some cold winds during the crypto winter. It laid off 80 of its 700 employees in May, along with other Latin American crypto startups, citing the need to rethink skills.

Despite the shaky start, Diaz-Ortiz said Latin America is still ready for crypto adoption.

“Ultimately, the best solutions in decentralized financing will always come from founders who meet these challenges and use their resilience to innovate,” she said. That’s why, she added, Latin America is such a great place for web3 right now.

This article is intended to provide general information designed to educate a wide section of the public; it does not provide personal investment, legal or other business and professional advice. Before taking any action, you should always consult your own financial, legal, tax, investment or other professional for advice on matters affecting you and / or your business.

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