Bitcoin's annual performance so far compared to the Brazilian riyal, along with the country's financial problems, may help drive demand towards the digital currency.

According to a new report published by the Delphi Digital company entitled Bitcoin Case the day before yesterday, the Brazilian central bank cut interest rates to 3%, and the fact that the riyal lost 30% of Its value relative to the dollar could alienate investors who find risk-for-reward swaps are no longer attractive in some local markets.

Delphi Digital has predicted that this potential displacement could lead to a further push towards Bitcoin (BTC) in Brazil: this does not mean that capital flows from emerging markets It will flow directly to Bitcoin ... but the sheer size of this potential move could act as another source for Bitcoin, especially if tight capital controls become more popular.

Bitcoin has achieved the best performance since the beginning of the year compared to the riyals - 74% - which is much higher than the performance of the US dollar, reaching 21.9%.

Brazil's mixed relationship with digital currencies

Although the country's Bitcoin market may be more mature for investors, Brazil's cryptocurrencies have had their share of regulatory challenges and influential critics.

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Four companies focusing on Bitcoin trading have been closed since 2019, until the President of the Brazilian Banking Association has argued that digital currencies are not currencies at all.