Africa Is Poised to Be the Next Frontier of Cryptocurrency Adoption

The pace of cryptocurrency adoption in Africa increased by 1,200% between July 2020 and June 2021, ranking it the fastest in the world. Discover the benefits of Bitcoin and why trade in it is rapidly expanding throughout Africa.

Dealing with Cryptocurrencies Will Attest to the Unexpected Volatility Nature

Despite the fact that our understanding of this digital or virtual currency varies, the majority of us have heard of Bitcoin by this point. The latest crypto market meltdown may have piqued people’s interest in the leading cryptocurrency during the past few weeks. Bitcoin’s price has fallen to an 18-month low as of June 15, 2022, reaching $21,179.20, while it peaked in November of last year at $68,990, the highest price ever seen for the cryptocurrency. Anyone who deals with cryptocurrencies in general, or with Bitcoin in particular, would undoubtedly witness to the unforeseen volatility of this emerging market, which has been there for more than ten years since Satoshi Nakamoto created Bitcoin.

The value of the most well-known cryptocurrency has been falling before. A prominent case occurred between 2013 and 2015, when the worth of this digital ledger dropped from $1,127 to $200, a decrease of 82%. When comparing the current cycle’s pricing to the historically high price point of $69,000 and $25,558, the price has decreased by 63%. Examining data from the past three years shows that despite these market fluctuations, Bitcoin trade in Africa has increased year over year.

For instance, according to research released by ChainAnalysis, the adoption of cryptocurrencies in Africa increased by 1,200% last year alone, with the global rate of adoption at 881%. When examined more closely, the data finds that Nigeria and Kenya lead all emerging markets in terms of peer-to-peer exchange trading volume for cryptocurrencies.

Only a small part of the continent’s population currently reflects the acceptance of cryptocurrency. Africa is likely to become the next region to adopt cryptocurrencies if this trend keeps up. Only 8.52% of Kenya’s population is actively engaged in cryptocurrency trading, according to top markets on the continent’s comparison of the quantity of cryptocurrency owners to the total population. South Africa, Nigeria, and Ghana all trail closely behind at 7.11%, 6.31%, and 3.01%, respectively. At this point, it would be interesting to see how Bitcoin is altering the payment environment in Africa and exactly what’s driving this massive acceptance of cryptocurrencies throughout Africa even before the most developed global markets.

Youth Population That’s Literate

With 1.4 billion inhabitants, Africa is the second most populated continent, right behind Asia. According to a survey by the Mo Ibrahim Foundation, the average age of people in Africa is 18 years old, and 60% of the population is under the age of 25. Similarly to this, the region’s Sub-Saharan literacy rate increased from 64.09% in 2014 to 65.58% in 2017. Zimbabwe, South Africa, and Kenya, with respective literacy rates of 89%, 87%, and 82%, are among the top-performing nations in this region.

On the other hand, the majority of African graduates live in metropolitan regions in search of a gainful job, and more than half of them are still unemployed. The majority of these young people are interested in finding new sources of income, which has lured them toward Bitcoin trading prospects. With individuals engaging in Bitcoin arbitrage trading and businesses accepting various cryptocurrencies as a form of payment, young and aspiring entrepreneurs are taking advantage of the revenue potential offered by the cryptocurrency sector.

Financial Restriction

For many African residents, accessing to financial services and products remains a significant barrier. Despite being among the 17 Sustainable Development Goals (SDGs) intended to end extreme poverty and promote shared prosperity worldwide, more than 60% of the population is still unbanked.

The high degree of bureaucracy imposed by financial institutions and the expense to access or transact through an intermediary account are two factors contributing to financial exclusion in Africa. For instance, it’s a laborious process in Kenya for a bank user to shift any sum over KES 1 million ($10,000), as doing so requires getting permission from the institution’s administration. The average cost of banking in Kenya is $45 per year, according to research by the investment technologies and business site The Exchange. This information helps explain why many banks are losing customers.

However, depending on the choices for moving money in cryptocurrencies, there is also the option of utilizing Bitcoin as a form of payment with minimal to no paperwork needed and nearly no cost.

Inflation

Most African countries are currently dealing with serious economic problems, including high rates of inflation and weak national currencies. Sudan, Zimbabwe, Ethiopia, Ghana, and Nigeria are among the nations with the highest inflation rates, with rates of 245.1%, 86.7%, 34.5%, 16.3%, and 16.1%, respectively. Any country’s economic financial sector suffers from rising inflation rates, which prompts investors to look for alternate investment opportunities.

However, the advent of cryptocurrencies like Bitcoin and USDT (the latter being a stablecoin fixed to the value of the USD) offers more investment options to investors in an economy. Historically, gold and the US dollar were the equities to hedge against growing inflation. It appears that the top nations with greater Bitcoin trading activity are also seeing a sharp increase in their rate of inflation, with Kenya’s inflation rate rising to 7.2% in 2022 from 5.40% in 2020 and Nigeria’s to 11.40% from 16.1%. (2022). Some Zimbabweans were forced to turn to exchange Bitcoin as a means of preserving money in 2015 as a result of the country’s spiraling hyperinflation rates, which forced the government to create $100 trillion notes.

Money-Handling Experience on Mobile

With platforms located in Africa accounting for more than 60% of all mobile money transactions worldwide, mobile money is still transforming lives all throughout Africa. The outstanding level of mobile phone adoption across the internet has also helped the utilization of mobile money. More than 80% of Africans, according to the International Telecommunication Union (ITU), possess or have access to a mobile phone.

Furthermore, the majority of people in Africa have a connection to the Internet, which makes it simple to communicate with people outside of their country and learn about cutting-edge ideas like Bitcoin trading. All of this, as well as the simplicity with which crypto assets can be converted into fiat, especially when using the mobile payment option, has enabled interested individuals to participate in crypto-related earning activities.

There were 387.5 million digital consumers in Africa as of 2022. In comparison to 2017, when it was over 139 million, the number has significantly increased. This means that this continent’s residents are no longer cut out from online trends, so they increasingly buy stuff online, gamble online (but due to the illegality of this past time in numerous African nations, they do so on offshore sites, such as those by the link), etc.

Conclusion

Finally, it’s vital to remember that the Bitcoin ecosystem is always changing and that no one can anticipate exactly what will happen in the future. However, the African continent will continue to have access to a wide range of options as long as technology is a part of our lives. Doing your own research is the golden guideline when making financial decisions in the crypto world.