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Cryptocurrency
by Natalia Revishvili on August 30th, 2020

An expert analysis why crypto trading is exploding in Africa

Overview

Since the first cryptocurrency was established in 2008, there has been an incredible increase in popularity to trade this market, especially during 2020.

With Africa being in the front row of online trading these past months, cryptocurrencies have become a favorite among traders, especially in South Africa, Nigeria, Ghana and Kenia, which are all ranked in the top 10 countries for cryptocurrency trading.

Cryptocurrency trading is the online transaction exchange of digital currencies for electronic payments. These digital currencies include the popular Bitcoin, as well as others such as Ethereum, Litecoin, and Ripple.

Although the Bitcoin mining activity is low and puts Africa in the high 30’s with a 0.2% on infrastructure, cryptocurrency ownership on a global scale, however, ranks South Africa third-highest in the world with 13% and Nigeria fifth with 11%.

The lack of regulating authorities across Africa is affecting the number of traders greatly as more than 60% of African governments are not hindered by enforcing regulations. Some North African countries, such as Morocco and Algeria, forbid the use of cryptocurrencies.

Influencing factors

Recent influences from the COVID-19 pandemic on Africa’s economy, the weakened state of businesses and the rising unemployment rate has forced individuals and businesses to seek alternative incomes, turning their hope and capital to online trading.

While traditional trading in shares and stocks plummeted greatly during the pandemic, cryptocurrencies have increased dramatically as there are several advantages for traders to invest in the cryptocurrency market.

Although it can be a very volatile market, when understood correctly and with comprehensive research and technology, the possibilities to increase one’s funds are immense, especially with leveraged trading.

The possibilities with this type of trading are endless. One should consider whether they want to speculate or buy digital currency. Furthermore, several different options are available as to which currency will be bought or speculated on.

Informed decisions should be made depending on the style and available capital of the trader. Updated forecasts, trends, and market analysis should always be kept in mind.

Opening an account is fairly easy and only a small deposit is necessary to start trading cryptocurrencies.

Its liquidity determines how quickly and hassle-free it can be converted into cash. As this is a very liquid market, traders can benefit from great prices, fast order execution, and accurate technical analysis without influencing the market price.

Even with cross-border payments, cryptocurrency trading is a low-cost, safe, secure, and fast process to go through. As the demand for cryptocurrencies rises, the value grows and opportunities increase.

Other benefits include the availability of 24 hours a day, seven days a week, which could be done from any smart device or PC with an internet connection.

There is no interference of a middle man as the transaction takes place directly between the buyer and seller, holds tax benefits as self-sovereign money storage and centralized governance doesn’t play any roles.

Conclusion

All of these factors play a role in why Africa has seen an increase in cryptocurrency trading. When looking at forecasts and how successful traders could be when understanding cryptocurrencies, the number of traders in Africa will continue to rise in the future.

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By Natalia Revishvili

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