The cryptocurrency market in South America has been concerned about the End of P2P Exchange LocalBitcoinswhich operated in several countries in the region, mainly Venezuela and Colombia, in addition to Brazil and Argentina.
But talking to the live coinsindicates another P2P platform in the region that the departure of LocalBitcoins from the market was expected.
This is because the volume of operations in the brokerage has decreased significantly, claims Guillermo Goncalvez, CEO of El Dorado. The platform features stablecoins for residents of South America, coming to Brazil in 2023.
What reasons led to LocalBitcoins shutting down? Binance may be “guilty”
Finland-based LocalBitcoins has stated that the “crypto winter” was the reason for the decision to shut down its global operations, but P2P competitor El Dorado is betting that other reasons may have triggered the event.
According to data from LocalBitcoins itself, the top markets of the P2P exchange in 2020 were Russia (17.4%), Venezuela (12.3%) and Colombia (11.3%), with a combined 41% of the global volume. Countries such as Brazil, Argentina and Chile also had significant volume on the platform at the time.
Guillermo Goncalvez, who is Venezuelan, believes several factors contributed to the closure of the Finnish company’s operations.
“After the launch of Tether Dollar (USDT) in 2014, P2P crypto users got a kind of digital dollar savings account, without the volatility of Bitcoin. This was the first challenge LocalBitcoins faced in the region.”
El Dorado’s CEO points out that most Venezuelan LocalBitcoins users were looking to access an alternative to buy dollars and protect themselves from local currency inflation. For example, Binance made a strong comeback in Venezuela in 2019, with a program to access stablecoins at no cost, which may have attracted customers in the country.
“For many LocalBitcoins users in Venezuela, saving in Bitcoin was not the right choice.
ultimate goal, but getting dollars into bank accounts in the US or Panama is. For example, Bitcoin was used in P2P as a bridge between the Venezuelan bolivar and the US dollar.In 2019, Binance announced the launch of its USDT P2P marketplace with a no-cost campaign in Venezuela. That, with the ability to send money between Binance users for free, caught the attention of the Venezuelan P2P Bitcoin user, a factor that came at a high cost to LocalBitcoins as Binance is the leader of the P2P market today.
Other P2P platforms should emerge and fill the gap left by LocalBitcoins
In addition to the low impact with the departure of LocalBitcoins in Venezuela, El Dorado’s CEO tells Livecoins that the future remains promising for P2P platforms.
According to him, the late platform had 8 million customers and was the largest P2P bitcoin marketplace. Such customers look for alternatives when the company leaves, but that promotes competition.
According to him, Venezuelan investors cannot make purchases with national cards, leading them to look for global fintechs with prepaid cards. And the El Dorado platform, for example, has helped its customers load their cards with stablecoins straight from Venezuela.
In fact, the platform will arrive in Brazil in 2023, and the application will even support the PIX.
“Over the past few months, we have validated ourselves as a P2P marketplace designed specifically for South America, built by the locals in the region, allowing us to provide a tailored solution as the P2P crypto user grows in LATAM. A thesis that we will export to Brazil in 2023 by enabling PIX in El Dorado P2P.”
Venezuelan living in Brazil does not believe that the end of LocalBitcoins will have an impact on his country
Livecoins also tried to talk to the “El Sultan Bitcoin“, Marketing Manager at Luxor. Venezuelan, now living in Brazil, he recently installed a Blockstream antenna in Santos (SP), becoming the country’s first full satellite node.
According to the “sultan”, “the impact of the departure of LocalBitcoins in Venezuela will be limited as brokerage volumes have been on a downward trend for quite some time”.
According to his analysis, days before the announcement of the end of the P2P platform, the volume was only 29 Bitcoins in Venezuela, which is equivalent to just over 600 thousand dollars.
For the sultan, Venezuelans are showing more interest in stablecoins than bitcoin, even surpassing volume in Brazil.
“The growing popularity of stablecoins, USDT in particular, has taken over a large market for LocalBitcoins in Venezuela. According to data from the latest Chainalysis global crypto adoption report, 34% of all stablecoin transactions under $1,000 belong to Venezuela. Even surpassing Brazil.”
According to the Brazil-based Venezuelan, the volume of centralized P2Ps is growing in the country, especially on Binance, Syklo and El Dorado.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
