How crypto trading turn to new norm for Africans

Africa’s interest in cryptocurrency, a form of digital currency is growing steadily in the past years, which has been touted to be disruptive innovations that will blossom on the continent. Therefore, the covid-19 pandemic made crypto the new investment opportunities for Africans.

The crisis probably accelerates the crypto token uses in the region that the health crisis has negatively impacted the regional economy, which is already in a precarious situation. The dwindling economic condition has resulted in millions of jobs lost, not just that. The Covid-19 has disrupted our lives and livelihood at a pace and scale not seen in living memory. The pandemic threatens to wipe out almost a decade of development progress in Africa, as the effect of the weaker health system, lockdowns, commodity price drops, trade collapse, evaporating tourism, and shrinking remittance hit the region all at the same time. Not only in Africa, but the crisis has upended the global economy.

The International Monetary Fund’s projections for 2020 are sobering for the continent a contraction of 3.2 percent in sub-Saharan Africa and 2.5 percent in North Africa. The human costs are immeasurable. Africa will account for about a third of the global labor force by 2050, even though the International Monetary Fund provided financing assistance to 37 countries in the region and immediate debt service relief to 23 of the poorest, most vulnerable countries in Africa. Still, that didn’t help matters to the region labor workforce, putting millions of Africans jobless and the economic situation amid the health crisis. For the first time in 25 years, sub-Saharan Africa is about to go into recession, according to World Bank estimates. The economic growth in sub-Saharan Africa is forecast to fall sharply in 2020.

The millions of job losses and dwindling economic conditions have seen a surge in Africa’s inflation rate, resulting in Africans alternating to investing and crypto trading. The new norm for African as investing and trading crypto guarantees daily funds for several youths to survive during this trying time. It is quite evident with reports from expert and independent body monitoring crypto globally. A report tracking the $33 billion worth of Bitcoin sent between exchanges found that Seychelles account for the vast majority. About 45 percent of Bitcoin transfer volume originated from the G-20 countries. However, tiny Seychelles covered 31 percent of the global amount in the first half of 2020.

Nigeria, South Africa, Kenya, Ghana, Zimbabwe, and Botswana started to have the highest penetration of cryptocurrency in Africa. Another report said that Bitcoin (BTC) peer-to-peer trading volumes record new highs in India, South Africa, Ghana, Kenya, Argentina, Chile, and Nigeria. The data compiled from Localbitcoin and Paxful at UsefulTulips. It was brought to light by an Independent researcher.

Consequently, according to the state of cryptocurrency in Africa, in the second quarter of the year, Nigeria led with $34.4 million in peer-to-peer transactional trades, followed by South Africa with $15.2 million, Kenya third with $7.8 million, and Ghana fourth with $640,000. The report shows how quickly crypto has garnered massive traction among Africans in a short space of time. However, as mentioned earlier, the inflation rate in African countries can be as high as double or even triple digits. When the inflation rate surges drastically, businesses face the challenge of appropriately pricing their goods, which significantly reduces consumer buying power.

This is where crypto comes in to play; the high inflation landscape plus weak economic situation have provided an ideal environment to foster crypto markets in Africa. According to blockchain experts, the UN’s Africa Renewal publication states that many African citizens use bitcoin to counter hyperinflation in their country. It expected that the numbers would keep increasing and participants as we continue to find a vaccine to contain the virus.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.