“With the great appreciation of the bitcoin and the beginning of regulation in Brazil, many institutional investors should start allocating part of their capital in cryptocurrencies”, said about the Brazilian cryptocurrency market the Director of Products and Partnerships at Transfero Swiss, Safiri Felix, who participated in Crypto Week, an event organized by the trading platform Nelogica.
According to him, a couple of factors are turning the market safer and therefore, it should attract more investors. Such factors are the acknowledgement of the economic activity of the cryptoassets custody and brokerage companies, combined with Normative Instruction 1.888, which establishes the mandatory reporting of transactions to the Internal Revenue Service by brokers and investors, and, this year, the specific code for registration in the Income Tax.
“The idea is investment diversification: buying bitcoin instead of leaving your currency melting in your pocket”, he pointed out. Safiri, who has been working in this segment since 2013, says that movements such as Tesla’s, which recently allocated a large amount of resources in cryptoassets, and rumors that Oracle should do the same, stimulate companies of all sizes to look into the possibility, as a measure to protect their capital.
Cryptoassets protect currencies from devaluation
In expert analysis, cryptocurrencies are not an option to replace means of payment, but rather to protect financial resources from deflation. “There are even specific uses, such as international remittances, but today the strongest narrative is that of programmed digital scarcity. This thesis has been gaining popularity, especially with concerns about the return of inflation”, he explained.
Safiri pointed out that with the appreciation of bitcoin, we see more and more banks and asset managers looking at cryptocurrencies. “There is an incentive to accumulate, the asset is scarce and the inflation outlook is real. This creates an interesting environment to invest in”, he said.
According to the expert, the market is mature, has custody solutions and there is opportunity to protect finances from rising costs. “We are at the peak of the bitcoin value. Currently, on a good day, B3 moves more than R$ 50 billion; bitcoin, more than US$ 50 billion.”
However, in his assessment, the market is cyclical. “As it gains traction, will we have a bigger drop or accumulation? The prospect is that this cycle will go through until 2024”, Safiri said. “Either bitcoin will value substantially by then, or the prospect is that we have an adjustment and start trading at a lower value than the current one. But the possibility of success has been increasingly likely, given the contributions and the flow of capital that has entered the market”.
BRZ benefits Brazilian market
The expert considers that there are still interesting prospects for appreciation. Even a report from Citi GPS, the innovation arm of Citigroup, says that bitcoin is close to a massive adoption movement.
However, according to him, the level of asymmetry now is higher than at the end of last year (2020). Therefore, in his opinion, the recommended thing is to have as much bitcoin as possible and something between 10% and 20% of ether (ETH) and other currencies.
For domestic investors, BRZ, which has parity with the real, is a strategy to have exchange rate stability. “The main advantage is the possibility of accessing the international cryptoasset market without exposing itself to volatility. As stablecoin trades globally, it opens up a range of possibilities for investors”, says Safiri.