The cryptocurrency excitement reached fever pitch in 2017 as Bitcoin struck $20,000. Whether a Bitcoin maximalist or an altcoin aficionado, we were all in a state of euphoria. Then things changed. The market took on a downward spiral and interest in the industry took on a similar path. As we recently reported, interest in the industry has dropped by over 90 percent, with crypto sites’ Alexa rankings being on a free fall as well.
In Africa, the narrative is different. During the 2017 logic-defying ascension of the industry, Africa was lagging behind the other continents. The number of crypto traders on the continent was small, with a huge majority of people not aware of what cryptos were. This shielded many from the catastrophic losses many traders incurred last year. From a rise in the number of traders in 2018 to increased Google searches, Africa is moving in as the rest of the world shies away.
The Blessing In Disguise
Africa is not renowned for its swift adoption of technological innovations. For instance, as the Western world quickly adopted telephones, Africa lagged behind. Years later, smartphones took over and replaced the telephone. The Western world had already spent billions of dollars installing telephone cables, and the switch proved quite expensive. Africa, on the other hand, hadn’t taken to telephones. This made the move to smartphones quite easy for the continent’s one billion people.
Cryptos have taken a similar path and Africa’s slow adoption turned out to be a blessing in disguise. At first, the continent was apprehensive, with many governments warning their citizens against cryptos. The tone from the lawmakers has changed significantly, and so has people’s attitude to cryptos.
One company that has reaped the benefits of Africa’s rising interest in cryptos is peer-to-peer crypto trading platform Paxful. While the likes of Coinbase and Binance have seen a significant decrease in trading volume in 2018 as many traders exited the market, its been a different story for Paxful. The firm recently revealed to Coindesk that its transaction volume increased by 130 percent in 2018. Africa was the primary driver of the growth.
West Africa was its biggest growth region, doubling its users in Nigeria and tripling them in Ghana. African crypto traders on Paxful accounted for 41 percent of the new users in 2018. Paxful, which has offices in Hong Kong, New York and Manila now has African users accounting for 35 percent of its users.
The Need For Cryptos Is Greater
Cryptos enthusiasts all around the globe have continually pushed for an overhaul of the finance system. With a few entities having the power to control the supply of money, the system is skewed to the benefit of the elites. And while the benefits of crypto will impact on everyone, there’s a far greater need for the revolution in Africa.
The continent battles with many challenges, one of which is a lack of financial inclusion. Even for those with access to financial services, some of the basic functions such as funds transfer are quite costly. In fact, remittances to Africa are the most expensive in the world according to the World Bank, almost as twice as expensive as second-placed Asia.
Cryptos will therefore have a much greater impact in Africa than anywhere else. And while everybody else frets about the bear market, the continent is beginning to realize just how much faster, easier, cheaper and more convenient cryptos are. While it doesn’t currently have as big an impact as the other continents, Africa will certainly shape the future of cryptos in the not-too-distant future.