Since the hit of the COVID-19 pandemic, the crypto market has been very robust. More people are now aware of digital assets. An increasing number of investors are also seeking to diversify their investment portfolios.
The traditional markets governed by the central bank have been very volatile, which has been an eye-opener for many to seek options. Gold and silver are one of the considered safe assets, but they have long lost their popularity. Gold, which was long considered a haven, has not been spared by the pandemic. This made people seek a digital gold, Bitcoin.
BTC (bitcoin) has been on demand by both retail and institutional investors. The skyrocketing values are clear evidence that the demand is growing by the day. The rush by big companies such as MicroStrategy, Square, Paul Tudor Jones, MassMutual, and SkyBridge Capital shows that cryptocurrencies’ future is bright.
2020 as the Golden Year
2020 has been the golden year for the crypto space. The numbers of institutional investors are higher than it has ever been in history. Companies such as MicroStrategy have made significant strides using BTC (bitcoin) as a cash reserve. Many companies also want a share of the spiking profits in the crypto world.
Despite the high numbers of institutional investors, the numbers in Africa are still not as significant. There is always a need for more understanding of cryptocurrencies and better regulations in place. There is no doubt that Africa needs more institutional investors to help the market and industry mature fast.
Many institutional investors prefer a space where there are more regulation and clarity. Simply because they invest tidy sums not to risk them going under.
Some African countries are working on regulations or a better market. South Africa is working on its AML standards.
Some countries such as Kenya, Ghana, Zambia, and Lesotho in Zimbabwe have no bad cryptocurrencies. But despite this, they have reservations regarding the usage. Africa needs further regulations to promote institutional investments.
In Africa, the biggest cryptocurrency markets in Nigeria, South Africa is Zambia, Uganda, and Kenya, with over 6 million Traders.
Cryptocurrency for Africa
Just like other regions in the world, Africa is also a beneficiary of cryptocurrencies. Cryptocurrencies have been used mainly for cross-border payments. Even though there are financial innovations such as mobile money payments, nothing beats using the blockchain for cross-border payments and money transfers.
Blockchain is an open ledger and does not need intermediaries. This makes money transfers much more straightforward.
There are many blockchain innovations in the continent and blockchain communities. Many companies are turning to blockchain to solve their problems, and most of the time, it is fueled by a crypto token. In Kenya, Nigeria, and South Africa, there are active blockchain communities where enthusiasts meet and share insights on using technology to solve the continent’s problems.
What does the future hold?
There is no argument that crypto and blockchain technology is the future. Millennials in Africa are enthusiastic about the technology and thus are willing to take the right measures to stay ahead.
As people become more knowledgeable about cryptocurrency, it gets better with time. As developed countries take measures to put frameworks in place, Africa will borrow a leaf from that, and with time it will keep up with the race. Indeed, Africa needs institutional investors as they are anchors to development.