The sharp increase in the price of Bitcoin over the last 12 months or so has led to a number of people, especially those who had invested early, becoming millionaires due to their faith in the cryptocurrency. However, even those who may have been attracted to this space in recent times, due to this price rally, have managed to benefit, since Bitcoin has continued to rise. This has helped many people who were otherwise struggling, and the biggest examples of this have been seen in Africa. Of course, bitcoin trading is not the only way to earn cryptocurrency to improve your life, but the bottom line is that crypto investing has helped many in Africa, for example, to be able to climb out of poverty.
There are examples of people in Nigeria, who worked odd jobs and wondered where their next meal was coming from, moving into cryptocurrency trading and making a comfortable amount of money from then onwards. This has helped them to pay off debts, get married, and even have enough money to invest in other businesses. What is encouraging is that most of these stories are about people who invested or worked in crypto trading well before the current bull run, showing that even before this market, Bitcoin trading was able to help many people get out of troublesome circumstances.
One of the factors driving so many people towards crypto trading in Africa is the high rate of unemployment. The unemployment rate in Nigeria, for example, has tripled to 27% in the last five years. This has then pushed more people to explore other ways of making money, such as Bitcoin trading, since the likelihood of getting a decent job has reduced drastically due to the state of the economy.
Another important aspect to this has been the increase in Bitcoin speculation as well. This is once again due to the unemployment rate, which leads to recent college graduates, especially those with an economics, finance or tech background, to turn to speculation in cryptocurrency markets to try and add to their earnings, or even as a substitute for full-time employment. Of course, this is an indictment of the state of various African economies, but crypto has helped many people in these countries to be able to earn some sort of living during this time.
Thus, it is no surprise that cryptocurrencies are so popular in Africa. Cryptocurrency transactions of over $10,000, to and from Africa, reached a peak of $316 million in June 2020, which was an increase of over 55% from the previous year. Africa is different to the rest of the world, in that cryptocurrencies are largely used by individuals and small businesses in African countries, rather than by financial and institutional traders. Africa is in a unique place to take advantage of this boom as well, since it has a relatively young population, and there has been growth in internet and smartphone availability and penetration as well, thus enabling more people than ever before to hear about crypto, and consider it as an option to make money.
The relative volatility of African economies and currencies has also played a part in the popularity of cryptocurrencies on the continent, while it is also being increasingly used to send and receive remittances, given its speed, reliability and safety over traditional money transfer options. Various African countries, such as Nigeria and South Africa, are now working on laws and regulations to help protect investors and other participants in the crypto space, which is a good thing, as the popularity of this space grows and more Africans put their money into it.
