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Africa does not rank among the best markets of crypto currencies but the trends are speaking something else.
More than 15 trading exchanges have opened up in Africa in last one year. The peer-to-peer marketplaces also recorded a spike in trading volumes after Bitcoin’s value skyrocketed. For instance, trading volumes in Kenya on localbitcoins.com increased manifold and reached 8.1 million in December. Luno, a cryptocurrency exchange of South Africa reported a transaction worth 2000 BTC in November 2017, when the digital currency’s rate was approximately $10,000.
Luno, is one of the oldest exchanges of the continent which started its operation in 2013 and boasts of 1.5 million users spread across 40 countries. By 2025, it aims to cross 1 billion customers.
North America’s Coinbase had reported 11.7 million users last year.
The inflation rate of several countries of Africa is quite high which makes the local conditions for adoption of cryptocurrencies more conducive. Moreover, the central bank of South Africa recently announced a pilot test using Ethereum’s blockchain technology for contracts. Thus, their paradigm of decentralization offers an alternative solution to the users which are in favour of the cryptocurrencies.
The new businesses that use blockchain are on the rise in the continent. Kenya-based BitPesa, works in vicinity with 60 banks and has seven mobile wallets on its platform. A payment and money transfer service, is also quite popular among people. The threat of government regulation which has created uncertainty over the future of the digital currencies is fairly low in Africa.
While the others have warned of the risks and threats associated with the cryptocurrencies, South African continent has maintained hands-off approach on trading exchange.
But, Africa is also susceptible to the same pressures as other crypto market.
Cryptocurrency traders in Africa were paying a premium of as much as 40 percent in 2017 as the Bitcoin price reached to record high. Reportedly, the premium occurred due to a shortage of liquidity, meaning sellers were able to command unrealistically high prices due to high demand from buyers. Thus, there are few challenges to be dealt in Africa too, but the market of Africa provides greener pastures for those who seek to invest in crypto-currencies.