Why Africans love cryptocurrency? | South Africa Today

Not a secret that almost all African countries encounter a high unemployment rate and inflation. As a result, people dive into the Crypto world. It allows them to exchange local fiat (useless paper) into growing cryptocurrencies. Moreover, the crypto world provides people with the opportunity to make fast money in bounties.

How to evaluate the crypto boom in Africa?

The current cryptocurrency boom attracts the attention of many people from all over the world. But the most significant flow of new crypto fans comes from Africa! For example, due to the Tokpie exchange stats, the number of African users grew by 63% in 2020 compared to 2019. The TOP 3 African countries where users came from in 2020 were Nigeria (+83%), Uganda (+1243%), and Kenia (+731%). Here is the table showing the range of African countries by the number of users in 2020.

Rank Country Users (2020y)
1 Nigeria 59.96%
2 Uganda 9.11%
3 Kenya 7.78%
4 South Africa 6.26%
5 Morocco 3.13%
6 Algeria 2.45%
7 Egypt 2.39%
8 Ghana 1.97%
9 Benin 1.13%
10 Côte d’Ivoire 0.71%
11 Cameroon 0.68%
12 Congo – Kinshasa 0.65%
13 Zimbabwe 0.45%
14 Zambia 0.45%
15 Tanzania 0.45%
16 Namibia 0.32%
17 Ethiopia 0.29%
18 Togo 0.26%
19 Burkina Faso 0.26%
20 Senegal 0.19%
21 Botswana 0.19%
22 Sudan 0.16%
23 Mauritania 0.16%
24 Mozambique 0.13%
25 Libya 0.13%
26 Angola 0.10%
27 Somalia 0.06%
28 South Sudan 0.03%
29 Liberia 0.03%
30 Guinea 0.03%
31 Gabon 0.03%
32 Congo – Brazzaville 0.03%

African Users stats: Tokpie cryptocurrency exchange

What are the reasons for the crypto boom in Africa?

It’s not a surprise to see so many new crypto passionate users from Africa. For many Africans, the crypto industry provides a solution for the two big problems.

The first problem is constantly inflating local fiat currencies. For example, Nigerian Naira had dropped down against USD by 71% for the last 12 years. Therefore, aiming to avoid losses, people are buying cryptocurrencies that are rising fast.

In fact, there is little proof to doubt that the potential for expediting investments has been the primary driver of the crypto boom in Africa. Like it has done for so many across the world, Bitcoin, in particular, has provided an opportunity for Africans to improve their wealth and manage their money more effectively.

According to data from CoinMarketCap, Bitcoin performed better than any other investment asset last year. The lead cryptocurrency began 2020 trading at $7,386 and ended the year with a price of over $29,000. With gains of over 300 percent, no investment product or stock across Africa has managed to provide comparable returns.

2020 was particularly challenging for African countries as well. Many of their currencies took substantial hits due to the coronavirus. In February 2020, the International Monetary Fund (IMF) reduced its economic growth forecast for Nigeria. In its document, the IMF cited the reduction in oil prices and drops in demand form top export locations like China.

Like Nigeria, many African continents depend on experts – and exports of single materials – for large chunks of their income. Considering that the coronavirus essentially hampered global trade, there is no telling how significant the effects of the coronavirus have been on the continent.

Despite all of this, people need to save. They need to make money and invest in something in the hopes of delivering better returns at the end of the day. Bitcoin – and cryptocurrencies in general – can provide such an opportunity/

The second problem is the growing unemployment rate all around African countries — for instance, the Unemployment Rate in Nigeria grown to 27% in 2020. So, many people from Africa are starting to participate in crypto bounty campaigns. Such participation allows them to earn additional money online without investing. For example, BountyMarketCap free tools enable people to detect the most profitable bounties and immediately monetize bounty rewards.

As for the third problem that cryptocurrencies solve, this is more of a banking issue. Currently, data from Statista shows that about bank accounts will have reached 465 million Africans Africa by next year. Considering that the continent is home to about 1.31 billion people, the level of banking penetration still has a long way to go to truly be impressive.

 

Cryptocurrencies provide an opportunity to bank the unbanked and provide the right levels of effective banking to these underserved people.

It’s worth noting that the banking problem isn’t the only one. It goes way beyond having banks that will set up physical locations and start providing services from the first day. For banking services to be effective, there is a need for infrastructural development and internet penetration. Africans are getting better on the latter, with internet facilities surging across the continent. However, the low levels of infrastructural development have made it more challenging for traditional banks to set up locations.

With Bitcoin, the unbanked Africans have access to banking services without having to rely on any physical structures. With Bitcoin, people can make quick, secure, and convenient transactions without having to leave their homes and stand in long lines at banking halls.

In a world where everyone is looking to stay safe and avoid crowded spaces, this benefit is especially critical.

People also won’t have to deal with the constant charges that these banks impose – account maintenance, credit card maintenance, transaction notification charges, and much more


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