Latin America has had its face share of Economic trouble for many years. These problems have led the rich to look for ways to protect the wealth from problems like hyperinflation, confiscation or any other problems that may arise. In the past days, they used Gold, offshore banking and real estate investing as a means to store their wealth. Currently, they have found the ideal store and a place where their wealth is protected from hyperinflation. This is non other than investing in Bitcoin.
Currently, the rich Latin Americans are being catered for by at least two Cryptocurrency funds. The funds are located abroad but have offices in Argentina, Mexico, Central America, and the Caribbean. These offices cater to the clients.
According to one of the funds Solidus Capital which deals with the top 8 cryptocurrencies: “Crypto is turning in to a haven for the rich families from Latin America.” Unlike other markets who are speculating like East Asia who discovered digital currencies this year due to volatility in Latin, America Cryptocurrency is seen as a hedge against economic instability.
According to the founder of Solidus Capital Carlos Mosquera out of control inflation in Venezuela is finishing people’s wealth and buying power. He says that this is what made him realize that Bitcoin is the answer. Using Cryptocurrencies is also over the Venezuela’s government which has very harsh capital controls especially in buying the USD or even sending funds abroad.
The latest Asset class
The second fund is used hugely in Latin America is the Miami based Crypto-based Assets Fund. This one is not very old as it started its operations in September. According to its founder Roberto Ponce: “We are highly convinced that Cryptocurrency will become a new asset class just like bonds and stocks became.”
The ponces Crypto Assets Fund acts as a passive index fund and already has $15 million of cryptocurrency under its management. Ponce plans to open another Cryptocurrency fund in 2018 which will offer active management. His said that his goal was to increase the passive fund to $50 million and raise $100 million for the active fund which will focus on Cryptocurrencies only.
Bitcoin is an identified store of value. When you keep assets in Bitcoin the value keeps on going up based on the market move. More to that Hyperinflation cannot affect what is stored in Cryptocurrencies.