With the recent proliferation of affordable and fast internet across the African continent, observers have noted a remarkable increase in the rate of crypto and forex trading in many countries across the region.
While it is not surprising that greater internet access would result in businesspeople and entrepreneurs finding new ways to grow their wealth in the online space, Africa has a unique set of factors which has made it conducive to online trading in particular.
In this article, we explore the rise of crypto and forex trading in Africa, and take a closer look at the ways in which this trend is impacting Africa’s diverse local economies.
Crypto trading in Africa: a new frontier
Cryptocurrencies first entered the global market with a bang when a mysterious entity operating under the pseudonym of Satoshi Nakamoto released Bitcoin in 2009.
According to Nakamoto, Bitcoin was largely created as a reaction to the banking crisis of 2008 that crippled world economies, and which was mostly attributed to widespread malpractice throughout the banking sector.
To this end, Bitcoin was a means of releasing local economies from their dependence on fiat currencies, and of allowing businesses to set prices according to their market value without suffering the impact of currency fluctuations.
This aspect has certainly been true for many of those in African countries who have adopted Bitcoin and the many other cryptocurrencies to have emerged in its wake, such as Ethereum and Litecoin.
Many African economies are plagued by ongoing hyper-inflation and currency instability as a result of political and economic instability, creating a troubling impediment to local business growth.
The adoption of cryptocurrencies has allowed business owners and entrepreneurs to by-pass failing national currencies and set prices for their goods based on their true market value.
It has also allowed increasing numbers of people moving into the remote online working sphere to receive payment quickly and efficiently, without the red-tape of national banks.
Apart from its business value, cryptocurrency traders are increasing as well, and use the cheap and easy access to online trading platforms to create new income streams, overcoming the broad problem of local unemployment to become, in many cases, steadily wealthier.
The explosion of Forex trading in Africa
As with cryptocurrencies, Forex trading has seen an unprecedented spike in numbers across Africa in the last year or so, also bolstered by fast internet and adopted by a largely young demographic interested in new and entrepreneurial means of making a living.
By June 2020, Forex trading had increased by a whopping 477%, and was seen largely to be the result of the Coronavirus pandemic.
Just as the many lockdowns have forced people from around the world to find new ways of making a living, so Forex trading in particular has become a vital means for young Africans to beat increasing unemployment.
African nations are predominantly young, with the median age being around 19, and this dynamic and adaptive demographic has embraced Forex trading as a means grow their wealth at home without relying on employment growth, which is likely to remain sluggish for some time to come.
All in all, Africa has proven itself to be the next frontier of crypto and Forex trading, being home to a unique set of factors that has allowed its youthful and tech-savvy populations to forge a new path towards self-empowerment and economic growth.