Record Highs for Cryptocurrency Holdings Among Brazilian Companies Amid Inflation

The number of companies holding cryptocurrency in Brazil has reached new record highs as of August amid an increased trust in cryptocurrencies and high inflation rates. According to local media reports, the country’s taxation authority, Receita Federal do Brasil (RFB), recorded 12,053 unique organizations declaring crypto on their balance sheets in August 2022. 

Steady Growth in Corporate Holdings

This represents a 6.1% increase from the 11,360 companies reported in July, making August the month with the highest recorded number of companies with crypto holdings to date. The RFB noted that Bitcoin (BTC) is the most popular cryptocurrency held by institutions, followed by stablecoin Tether (USDT).

Individual Investors See Slight Decline

Interestingly, the number of individual Brazilian investors holding crypto fell from the previous month, down to 1.3 million in August. Meanwhile, the total value of declarations saw a slight decline, likely due to the volatility within the crypto markets, with August’s total dropping to $2.1 billion (11 billion Brazilian reals), down from $3.4 billion in July.

Transaction Volume Insights

Among the cryptocurrencies, the stablecoin USD Coin (USDC) dropped from becoming the third most transacted coin to fifth place from July to August, losing ground to Ether (ETH) and Brazilian Digital Token (BRZ), a Brazilian real-pegged ERC-20 token. The transactional behavior indicates that USDT had the most value transacted, with over $1.42 billion moved across nearly 80,000 transactions in August, averaging roughly $17,500 per transaction. BTC came in second, with almost $270 million transacted, but took first place for the number of transactions, clocking in over 2.1 million at a much lower average transaction amount of $130.

Public Trust in Crypto Remains High

Public sentiment regarding cryptocurrencies in Brazil remains robust, as highlighted by a September Bitstamp “Crypto Pulse” report, which showed that 77% of respondents indicated a level of trust in digital assets. This trust accompanies an ongoing shift in the financial landscape, with multiple financial companies, including brokerage giant XP Inc. and payment application PicPay, integrating cryptocurrency services in August.

Inflation and Market Trends

In context with the economic climate, Brazil’s inflation rate reached a 26-year high of 12.1% in April but has since cooled slightly to 8.7% as per the latest figures in August. As inflation pressures continue to shape consumer attitudes, the increasing uptake of cryptocurrency among Brazilian companies underscores the evolving financial dynamics in the country.