2020 has been a massive year for cryptocurrencies. As political and economic turmoil has hit many of the world’s nations, a different asset class has been the clear champion. Cryptocurrencies champion BTC (Bitcoin) and ETH (Ethereum) and soaring to record highs as investors and other interested parties join in on the party. As of writing, Bitcoin has surpassed the $19,000 mark as Ethereum has gone past $600. These moves haven’t gone unnoticed in Africa. The second most populous continent in the world is taking notice of what’s going on in the crypto markets and wants in.
Africa’s move in P2P crypto trade
Most of the world’s biggest investors in digital assets and the surrounding industries have mostly focused on America, Asia, and Europe. This is understandable, given how much attention these currencies are gaining and the money standing to be made on these markets. Africa, however, wasn’t on their radar given there wasn’t a lot of activity during the first quarter of 2020. As time has progressed, events on the continent have shown that Africa can also be a powerful industry player.
One of the first international exchanges to recognize Africa as a viable market was Binance. To leverage the interest in cryptocurrencies on the continent, Binance set up shop in Uganda. People could use their traditional fiat currency, the Ugandan shilling, to purchase different cryptocurrencies from the shop. Seeing the continent’s potential, other players started moving into the continent, looking to capitalize wherever possible. Looking at the statistics for the third quarter of 2020, Africa stood second after North America in terms of transaction volumes. Since March of 2020, the exchange has processed more than $240 million in African currencies. This means that the market is there and growing with each passing day. Here are a few reasons why Africa is witnessing such a strong rise in P2P trade.
A young literate population
Africa has a total population of about 1.34 billion people. According to statistics by the Mo Ibrahim Foundation, more than 60% of this population is below 25 years old. This makes the continent with the largest number of young individuals globally. Given that most of this young population is literate and unemployed, they are left searching for opportunities. Bitcoin and other similarly lucrative digital assets have provided one such opportunity for the youth to make money. Additionally, the youth are looking for better, more economical ways of doing things. For instance, receiving money from international sources attracts very high fees using regular channels such as banks. Using P2P platforms, people can receive and exchange money, with low transaction fees.
Mobile money and smartphones
A lot of innovations in Africa have been as a direct result of the challenges they face. One such innovation stems from the form of mobile money. Statistics from the International Telecommunication Union show that more than 80.8% of Africa’s population have mobile phones. Today, you don’t need a smartphone in Africa to either send or receive funds, thereby lowering entry barriers into the market. This means that people don’t have to use hard fiat currencies to buy cryptocurrencies or get pain when they sell, which means that more people can participate.
Thriving crypto communities
For the impact of any crypto to be felt across a nation or continent, it needs a strong community pushing its agenda. Africa is home to some of the largest crypto communities on the web right now. For instance, in Kenya, associations such as the Blockchain Association Kenya have been instrumental in raising awareness about blockchain technology and how it can help our industries. Additional online communities on Facebook help newbies learn about digital currencies and even how to make money trading them. With these communities in place, people who want to experiment with cryptocurrencies have an environment where they can get correct, valuable information to enable them to make better, more informed decisions about the crypto they choose to invest in.