The adoption rate of cryptocurrency in Nigeria hits new highs and the price of Bitcoin has hit a more than 60% premium.
Africa might just be poised to become a major Bitcoin trading scene, according to data and rapidly increased use of cryptocurrency.
According to CEO of Nigerian-based cryptocurrency exchange Yellow Card, cryptocurrency is quickly gaining momentum across Africa, particularly in Nigeria, South Africa, Ghana and Kenya. He suggested in an interview that he thinks that Bitcoin will continue to expand, moving across Africa:
“At this point, it’s just a matter of time before it continues to expand outward to the rest of the continent.“
Bitcoin Might Be Much Bigger In Africa Than Data Shows
African trading might not be well represented, as it sees much more over-the-counter, or OTC, cryptocurrency transactions. This means that showing volumes based on cryptocurrency exchanges alone doesn’t offer the full story. As Maurice stated, the majority of trading doesn’t happen through formal exchanges. Instead, Bitcoin and other cryptocurrencies change hands through WhatsApp, or Telegram, or informal OTC. He continued to say:
“The actual volume in Africa, I would estimate that it’s at least five to eight times higher than any actual volume number that you can find, just based on the amount of money that moves through these dark pools, essentially, through these Telegram and WhatsApp groups.”
Bitcoin In South Africa Increasing Rapidly
According to Maurice, it has been estimated that Nigeria and South Africa fall in the top five countries in terms of cryptocurrency users per capita. He thinks that up to 10% of the people in South Africa have either owned or currently hold Bitcoin. Comparing the crypto-savvy African countries to America, Maurice noted:
“In Nigeria and South Africa especially, it’s very unique in that pretty much anyone you talk to has at least some base level of understanding of Bitcoin.”
Read more: South Africans Are Leaving Their Jobs To Make Money With Bitcoin
The Use Of Bitcoin Makes Sense For Africa
The CEO continued to explain that he thinks that Bitcoin offers a sensible asset and currency for Africa, given its decentralised nature. Cryptocurrencies, digital assets and Bitcoin might help resolve the economic problems African countries commonly face from high inflation rates. Along with the speedy transactions and completely digital nature, Bitcoin offers a neat solution to the problems some countries which battle with rapid depreciating national currencies, such as the Zimbabwean dollar. Even though Bitcoin is volatile, the digital asset might be the alternative asset that developing nations need.
Is Bitcoin Worth It For South Africans?
Over the past decade, Bitcoin and cryptocurrencies have received a strong reputation for the volatility. At times, the price of cryptocurrency tokens has swung like a pendulum, spiking quickly and breaking soon thereafter. Over the past year, however, the price of Bitcoin has remained fairly stable ranging between $8800 USD and $10100 USD.
As the economy in South Africa, is rattled further by the lockdown and Coronavirus pandemic, the condition of the national currency is not looking good. The Rand already weakened from a political front is predicted to lose significant value, which might force South Africans to look to other investments to diversify their assets and retain a healthy portfolio.
Bitcoin, as a potential alternative asset, it is able to boast an incredible 7 005,45% ROI since its inception in 2013. The Rand, in comparison, has seen a shocking decline from a 9.11 ZAR price tag to 1.00 USD trading value in 2013 to the price of 16,66 ZAR.
Investing in cryptocurrency has the potential for risk, but that comes with the potential for a high reward too. Given the trajectory of Bitcoin price over the years, coupled with the fact that it seems to hold stable at the moment, it might be worthwhile for South African investors to consider adding cryptocurrencies to their portfolios.