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Bitcoin In Sports And What The Future Holds

The sports industry represents a massive opportunity for Bitcoin adoption, as further sponsorships and deals are expected.

Bitcoin has experienced seismic growth in the past few months: its price has risen dramatically since January 2021 and is expected to continue to trend upward. This growth underscores bitcoin’s massive potential as an investment asset. For this reason, pro athletes and major sports clubs are capitalizing on Bitcoin. For instance, Russell Okung, a Carolina Panthers offensive tackle, recently became the first NFL player to receive a salary in bitcoin.

In this article, we will explore the future of Bitcoin in sports. But first, why are pro athletes shifting to investing in bitcoin?

Why Pro Athletes Are Investing In Bitcoin

1. To Have More Control Over Their Wealth

Bitcoin gives athletes more control over their money by cutting intermediaries. Many athletes have endorsements and corporate sponsorship deals. The agencies that manage these deals end up taking a significant amount of money.

By using bitcoin, athletes can enter deals without necessarily going through middlemen services like the kind agents offer. These endorsements involve large amounts of money. Using bitcoin for payment helps to avoid high taxation as the capital gain’s rate can sometimes be lower than ordinary income tax, depending on your jurisdiction.

2. Bitcoin Provides Privacy And Security

The government and sponsoring companies track athletes’ spending habits. In addition, their high profile and fame can get athletes targeted by fraudsters and scammers. Bitcoin gives high-profile athletes a sense of security by keeping their identities private should they decide to take the necessary privacy precautions.

3. Investment

Bitcoin is one of the fastest-growing sectors of financial technology. By investing in the industry, athletes are poised to reap massive profits. Some top athletes with massive investments in cryptocurrency include Lionel Messi, Nikita Kucherov, Floyd Mayweather, and Matt Barkley.

NFL and NBA Investments In Bitcoin

The Sacramento Kings became the first NBA franchise to accept payment in bitcoin in 2014. The aim was to enhance the customer experience when buying season tickets and merchandise. In April of 2020, the Kings announced, according to Forbes,  that players on the team would be eligible to receive their salary in bitcoin. 

In 2019, the Dallas Mavericks started accepting bitcoin as a payment method for merchandise and tickets. Similarly, the Miami Dolphins started accepting bitcoin payments during the 2019/2020 NFL season.

Athletes’ Involvement In Bitcoin

Russell Okung is the Vice President of the NFL Players’ Association and a former Los Angeles Chargers left tackle. However, his name hit news headlines when he became the first NFL athlete to receive a salary in bitcoin. It all started when he visited his ancestral home in Nigeria and was unsuccessful in trying to make a bank transfer from his US account.

This incident pushed Okung towards bitcoin. In fact, he tweeted, “Pay me in bitcoin,” in May 2019. Although the Chargers declined the request, Trezor offered Okung a free wallet. He recently received further good news: the Carolina Panthers will pay half of Okung’s $13 million salary in bitcoin. Nevertheless, the Panthers will not be paying the player in bitcoin directly. Instead, they will send the funds to Strike, a platform that converts payments to bitcoin, which will, in turn, pay Okung in bitcoin.

Strike is also planning to attract pro basketball and baseball athletes, according to Coindesk, and New York Yankees baseball players and Brooklyn Nets basketball players have joined the program. Matt Barkley is already into bitcoin mining, according to his twitter. Without a doubt, Okung has set the ball rolling.

Oakland Athletics Selling Tickets For Bitcoin

One critical development in Bitcoin adoption in sports is accepting bitcoin as payment for ticketing. The COVID-19 pandemic has discouraged the handling of paper money, a trend that was already in motion prior to the virus. Bitcoin is becoming more widely accepted for convenience and health reasons.

Accepting bitcoin is a meaningful way for teams to rake in more dollars as they wait for the normal resumption of sports activities. Essentially, a shift towards bitcoin will characterize the new normal. The Oakland Athletics are a pioneer of using bitcoin in professional baseball for full-service payment.

Bitcoin In Soccer Transfers

One of the most intriguing actions in soccer is the buying and selling of players. During every transfer window, soccer teams spend a gargantuan sum of money. Upcoming youngsters are fetching as much as €100 million.

Using bitcoin for transfers is a new milestone in the sports industry. In 2018, Harunustaspor from Turkey signed Omer Faruk Kirogul at a cost 0.0524 bitcoin. Inter Madrid also pulled off a unique signing by buying David Barral from Real Madrid B using bitcoin.

Club And Team Sponsorships

If you are a keen sports enthusiast, you might have seen the names of major bitcoin exchanges on sports attire. Bitcoin exchanges’ names are now commonplace in tournaments. A deal between FTX cryptocurrency exchange and the NBA for the naming rights to the Miami Heat’s arena is close to completion, at a price of $135 million for 19 years.  

In 2014, BitPay sponsored the St. Petersburg Bowl to promote Bitcoin. Similarly, eToro, a trading platform based in the UK, is sponsoring several EPL soccer clubs, including Crystal Place, Tottenham Hotspurs, Leicester City, Southampton, Brighton, and Hove Albion FC. The EPL is one of the biggest soccer leagues in the world and boasts immense popularity.

In general, bitcoin can be used to pay for player transfers, reduce ticket scalping, and authenticate merchandise. Another example, In 2018, Gibraltar United football club paid their players in bitcoin. These developments highlight Bitcoin’s massive potential in sports.

The Future Of Bitcoin In Sports

With Bitcoin increasing in popularity, its adoption in sports will continue to rise. In the next year, we will likely see more clubs entering into sponsorships with bitcoin-related firms. Moreover, more clubs will shift to using bitcoin as their payment method for players’ wages and transfers. Like in other industries, the future of Bitcoin in sports is bright.

Source: Bitcoin magazine

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The Rising Popularity Of Bitcoin In South Africa

A combination of factors makes South Africa a notable hotbed for Bitcoin adoption, even among a region that has embraced BTC.

South Africa is, without doubt, one of the most advanced countries in Africa — if not the most advanced. The South African country has also become a popular hotbed for the digital currency market. In fact, it is considered by many to be the next frontier in Bitcoin.

According to the cryptocurrency exchange Paxful, South Africans recently traded more than $2.5 million worth of bitcoin in a single month.

Technological literacy is quite widespread in Africa. And since Bitcoin is based on blockchain technology, it has triggered a lot of interest on the continent, especially among the youthful population. Per Google Trends data, South Africa is ranked as fourth among all countries in the world for the frequency with which its citizens searched the keyword “Bitcoin” over the last year. Countries like Nigeria, Ghana and Kenya, in addition to South Africa, have also demonstrated massive interest in bitcoin. Twitter CEO Jack Dorsey is reportedly planning a visit to Africa to explore crypto opportunities thanks to the widespread bitcoin adoption there.

The enthusiasm around ingenious technologies such as Bitcoin and blockchains has boosted adoption in South Africa. Many of the properties that make Bitcoin appealing in any place around the world can be listed as reasons why it is particularly popular in South Africa.

For instance, it is easy to access the peer-to-peer marketplace and cryptocurrency exchanges there. Using these platforms can be more simple and straightforward than opening and operating a bank account. Some of the popular bitcoin exchanges in South Africa include VALR and Luno.

Also, Bitcoin is decentralized and transverses all borders. This makes it an efficient payment method. And, besides enabling payment transactions, bitcoin is considered a wealth storage asset. In other words, investors classify the digital currency together with precious metals such as gold when it comes to storing value. This versatility feature endears bitcoin to many investors, including South Africans

The Volatility Of The Rand

But there are some conditions specific to South Africa that make Bitcoin appealing to those who live there.

The South African rand is, according to forex brokers operating in South Africa, considered one of the world’s most-traded currencies in the world with high volatility tendencies. For instance, in March 2020, the rand’s volatility reached its highest mark since the 2008 financial crisis. The negative swing of the fiat currency sent shivers down the spines of investors. As a result, many investors moved to use bitcoin to shield their wealth against a sharp fall in prices.

Volatility weakens local currencies, leading to dollar scarcity and making bitcoin a preferred alternative for transactions. High demand for bitcoin due to weak fiat currency boosts its adoption. Here is another point: Government failure in South Africa has also boosted cryptocurrency adoption as investors use bitcoin to hedge against political risks.

Favorable Money Transfer Costs

Besides accessibility problems, processing transactions through banks in African countries is often a slow and costly experience. Additionally, you must provide personal information, including the date, your name, your date of birth and your home address. The complex bureaucracy makes the money transfer process very complicated.

Bitcoin transactions, on the other hand, are quick and much cheaper. Deposits, withdrawals and other transactions often do not require as many personal details. Aside from being cheaper, bitcoin transactions are also more convenient methods of transferring value. This makes bitcoin an appealing alternative to fiat currency, growing its adoption significantly.

Impact of Government Regulations

Initially, there were no regulations governing bitcoin adoption in South Africa. However, the government has put anti-money laundering (AML) regulations into place.

The South African Reserve Bank is in the process of allowing the private sector to experiment with cryptocurrency use cases under regulatory supervision. However, the institution likely wants to be careful and conservative with approving bitcoin activity, like other regulatory bodies doubtlessly are. A significant goal is to prevent people from channeling money out of the country through encrypted and anonymous transactions.

That notwithstanding, the use of bitcoin and other cryptocurrencies is still not adequately regulated in South Africa to protect newcomers, meaning there would be no recourse if you lost your money due to a bad actor.

Final Words

Bitcoin adoption has grown significantly around the world in the recent past. Some of the major causes of the growth include emerging cryptocurrency markets, major fiat currency fluctuation and the development of financial infrastructure. While the most-known African country for bitcoin adoption is Nigeria, South Africans are far from idle when it comes to their adoption of BTC.

Going forward, wider access to education and the internet will unlock the full potential of bitcoin in the country. Bitcoin will deliver on its promise as a new class of asset, giving investors more power through their portfolios without the need to rely on intermediaries.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Source: Bitcoin magazine

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Nigerians Need Bitcoin, So Where Will The Restrictions Lead?

The massive rally in bitcoin prices has created a lot of buzz around cryptocurrencies lately, but Nigeria is one of the countries where bitcoin has been widely accepted for some time. The West African country has the highest bitcoin trading volume in Africa and recently ranked second globally of any country after the United States. According to Bitcoin.com, Nigerians have traded more than 60,200 BTC (worth more than $566 million) since 2015 through Paxful’s P2P exchange. 

Why Has Bitcoin Risen In Nigeria?

Numerous factors have contributed to the tremendous rise of Bitcoin adoption in Nigeria. One of the major reasons is stringent forex policies by the Central Bank of Nigeria (CBN). Also, a decline of the naira (the country’s fiat money) has made bitcoin appealing to Nigerians. For instance, on December 18, 2020, a communique from CBN directed deposit money banks to close all naira accounts for international money transfers operators to “ensure that all diaspora remittances are received by beneficiaries in foreign currency only.”

Nigerians have resorted to seeking alternative currencies due to dollar scarcity caused by the stringent banking laws. In fact, bitcoin adoption has grown significantly in other countries that have experienced diminishing confidence in national fiat currency and rising inflation, such as Zimbabwe. 

In Nigeria, the bitcoin trade has increased by 19 percent annually from 2017 to 2020, with 2020 recording the highest volume (20,504.50 BTC). During the lockdown, the bitcoin trade increased by 30 percent, with the peak of the pandemic recording the highest volume. According to CoinDesk, new account registrations for Paxful increased by 137 percent  between January and September 2020. The increased popularity of BTC is also evidenced in the gambling industry, with many bitcoin casino sites operating in Nigeria that are often located overseas.

A Looming Bitcoin Ban

While bitcoin and some other cryptocurrencies are decentralized, CBN is cracking down on their trade. On February 5, 2020, cryptocurrency enthusiasts in Nigeria received shocking news. CBN issued a reminder to all regulated financial entities that they were prohibited from facilitating businesses involved in cryptocurrency transactions. Therefore, transacting bitcoin is essentially prohibited. 

CBN initially banned the provision of financial services to cryptocurrency exchanges in 2017. However, it allowed banks to facilitate customer exchange, provided they met certain requirements. The latest directive seems to make facilitation completely illegal. By regulating cryptocurrency transactions, the central bank aims to take more control of the international payment system.

The young and tech-savvy generation of Nigerians are using bitcoin to maneuver around the restrictive monetary and banking system. As such, P2P exchanges are the most popular methods of trading bitcoin. These decentralized platforms connect buyers and sellers without the need for third parties. This means that bitcoin traders can circumvent government regulation. 

Niara Instability

Meanwhile, the Nigerian naira has experienced divergent exchange rates leading to increased instability and uncertainty. As a result, the financial authorities are now putting in measures to shield the naira and micromanage foreign exchange supply. Due to these restrictions, bitcoin is considered a suitable alternative for international transactions. 

Numerous, easy-to-use bitcoin exchange platforms have accelerated the adoption of bitcoin in Nigeria. The most popular platforms include Binance, Paxful and Luno. As per Bitcoinke, Paxful is currently the leading P2P exchange platform in the world, controlling about 52 percent of the global market share. Local platforms such as BuyCoins, Busha and Quidax are also quite popular. Besides these platforms, some people transact using informal channels such as WeChat, WhatsApp and Telegram.

With about 1.3 million accounts, Nigeria forms about a quarter of all registered accounts on Paxful. According to Nne Nwachukwu, the Paxful Nigeria regional manager, Nigerians mostly use the platform for peer-to-peer and arbitrage trading. A significant number also use local platforms for remittances.

Local apps such as BuyCoins allow Nigerians to buy and sell bitcoin using Nigerian debit cards. Many freelancers and expat Nigerians use BuyCoins, which processed transactions worth $140 million last year.

The central bank has not clearly defined the reason for the ban, listing only vague concerns about cryptocurrencies’ use in illegal activities. However, the ban may be due to the asset class’ dominance over the country’s fiat economy. Currently, assets worth about $4 billion are embedded in cryptocurrencies in Nigeria.

#EndSARS Protests And Bitcoin

According to CBN, the ban was instituted in good faith. To be specific, the central bank claimed that it wants to protect Nigerians from the speculative market. However, critics believe that the ban is associated with the recent #EndSARS protests against police brutality. Also, the government may believe that digital currencies are used to fund terrorist groups such as Boko Haram.

The protestors and aid groups resorted to accepting donations in bitcoin because the government restricted their access to financial services.

As noted above, last year, CBN issued a directive instructing banks to close all accounts that receive money in foreign currencies. This has affected people living in the diaspora, sending money home, as well as freelance workers who accept payments in foreign currencies. 

Diaspora remittances are restricted only to domiciliary accounts. This type of account limits Nigerians to receiving payment in foreign currencies and exchanging them for naira. However, operating these accounts comes with strict measures, such as $100 minimum deposits and the requirement of multiple references. 

But, that is not all. Since mid-2020, banks have limited the amount of money that Nigerian people can spend using their debit cards. Typically, banks are limiting withdrawals to $100. The reduction was necessitated by the shortage of dollars caused by a decline in oil prices, the country’s main export. People who want to import items or buy dollars have resorted to using bitcoin. 

Where Things Will Go

A group of senators has already opposed the CBN order. In fact, they have summoned the central bank to expound on the latest development. However, some senators support the CBN directive, claiming cryptocurrencies have rendered the naira almost useless. Also, the Nigerian securities and exchange commission has endorsed the CBN directive.  

CBN has taken issue with cryptocurrencies’ volatility and opaqueness. Other countries, like the U.S. and UK, also appear to be clamping down on cryptocurrencies. The Financial Conduct Authority (FCA) has banned the sale of cryptocurrency derivatives to retail investors to protect rookie investors from sudden and unexpected losses. 

Many African countries, including Kenya and Ghana, do not recognize cryptocurrencies as a form of currency because they are hard to regulate. After Nigeria’s ban on cryptocurrencies, many African countries — such as South Africa, where bitcoin is widely accepted — are probably monitoring the development closely. Other central banks in these countries will most likely move into action to protect local fiat currencies by banning cryptocurrencies as well.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Nigerians Need Bitcoin, So Where Will The Restrictions Lead? appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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Bitcoin Investment In 2021: What Should We Expect?

The bitcoin price has surged about 300 percent over the last 12 months thanks to mainstream adoption and institutional interest. It has rallied massively to surpassing all-time highs of $41,000. At the time of this writing, the price is hovering around $35,000 and it will be interesting to watch traders’ reactions and price behavior for the rest of 2021.

The Bull Run Will Likely Continue

Bitcoin’s bull cycle will likely continue, especially in the second half of 2021. One of the causes of price increase will be widespread adoption. Currently, relatively few people accept and use Bitcoin in everyday life. However, we could see mainstream acceptance in the coming months. For instance, PayPal has allowed its users to buy and sell bitcoin using PayPal accounts. Also, Square invested $50 million in bitcoin. Ongoing mainstream adoption like this could boost bitcoin’s price significantly.

The liquidity in bitcoin has been a telltale sign that more institutional bodies are at play. Similarly, throughout 2021 the institutional interest is expected to drive the prices of bitcoin and other cryptocurrencies. 

In another sign of the mainstream growth of cryptocurrencies expected in 2021, major cryptocurrency exchange Coinbase is expected to become a publicly-listed company this year. The exchange’s institutional assets increased from $6 billion to a whopping $20 billion between April and November of 2020.

Caused by the U.S. dollar’s cyclical bear market and global liquidity, bitcoin will benefit significantly from people hedging against inflation. Many retail traders will also jump in due to the fear of missing out (FOMO), pushing the price further. Traders who will not want to invest directly in bitcoin will trade contracts for difference (CFDs) on bitcoin via forex brokers and trading platforms.

Institutional Interest

As mentioned above, in October 2020, PayPal announced that it would support buying and selling cryptocurrency. Also, other Institutions and Wall Street giants have shown interest in cryptocurrency. For instance, JPMorgan Chase & Co. and Citibank are predicting a bullish bitcoin market. According to a leaked report from Citibank, the analysts refer to bitcoin as 21st century gold predicting that it could hit $318,000 by the end of 2021. Likewise, Will Woo, a former partner at Adaptive Capital, has referred to $200,000 as a conservative price.

A note to institutional clients from Tom Fitzpatrick, the global head of CITIFX, leaked on Twitter. The note showed a chart of three bitcoin bulls in the last decade. He suggested that the bitcoin rally could hit a peak of $318,000 in December 2021. However, other analysts such as BTIG and Bloomberg have been more conservative, predicting the price will reach $50,000.

Fiat Fiscal And Monetary Policies

Fiscal policy and monetary policies aiming to devalue currency will work in favor of the bitcoin price. Much of the demand will come from investors who fear that the money printing will devalue conventional money. With fiat money growing out of control, bitcoin is seen as a fixed asset, just like gold. 

Besides a weak monetary policy, the dollar could also be affected massively by the COVID-19 vaccine rollout. For these reasons, the demand for bitcoin might increase significantly.

Pullback Could Happen

While cryptocurrency proponents are exuberant, there is a possibility that bitcoin prices won’t rise beyond the all-time high set in 2020. In fact, the price may fall back and remain below this mark for some time, as was the case during the 2017 rally. Some believe that the only time bitcoin is likely to reach another significant high is in 2024, following the next mining subsidy halving. 

Bitcoin’s popularity as digital gold is spreading fast. However, unlike gold, bitcoin is experiencing its first global crisis, caused by COVID-19, as it was born in 2009 following the 2008 financial recession. The 2020 bear run in the market saw investors sell equities for cash. Even gold, which is considered by many to be a safer investment than bitcoin, dipped in March. Bitcoin crashed hard in mid-March too, but the bitcoin case was different. The cryptocurrency bounced from the bottom a month later in a bull run that continued until the end of the year.

Regulators

Regulators have been scrutinizing digital currencies for years. Some people, albeit only a few, are using cryptocurrencies to engage in illegal trades and with the surging value of cryptocurrencies, governments around the world will be looking closely at the market. For instance, a lawsuit by the U.S. Securities and Exchange Commission (SEC) against altcoin project Ripple saw XRP prices fall by almost half. 

Regulatory agencies could suddenly erect a hurdle to tame unscrupulous activities surrounding bitcoin, but this regulation couldn’t affect bitcoin’s bullish run significantly.

Competition From Central Banks And Big Tech

Transactions involving different fiat currencies can take days and involve heavy fees and a global digital currency could significantly streamline this process in 2021. While bitcoin adoption is growing, the cryptocurrency could face competition to solve this problem from big tech. A good example is Facebook’s digital currency and, while Facebook diem is quite different from Bitcoin, it may draw some attention away from bitcoin in 2021.

Likewise, central banks are also competing against bitcoin. As reported by Banks for International Settlements, 80 percent of central banks are on the verge of developing some form of digital currency. For instance, China is working toward the adoption of a digital yuan. In many critical ways, these central bank digital currencies will be vastly different than bitcoin.

Conclusion

In general, the adaptation of bitcoin in commerce is a perfect cause for price increases in 2021. While bitcoin’s price and adoption is expected to proliferate, we can’t rule out the opposite and volatility is certainly possible.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Bitcoin Investment In 2021: What Should We Expect? appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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How The Use Of Bitcoin In Africa Continued To Grow In 2020

2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.

The shift toward the adoption of bitcoin and other cryptocurrencies in Africa did not take off until 2014. That was when Bitcoin exchanges and transactions kicked off, with adoption led by Nigeria. Since then, the number of Bitcoin users and transactions done in bitcoin and other cryptocurrencies has exploded. 

At no time in history has the use of Bitcoin in Africa been so frequent as it is today. Bitcoin has thrived in Africa, and 2020 has been a breakout year for Bitcoin in the continent. But where exactly was Africa coming from before this surge and where is it headed in 2021 and beyond as far as Bitcoin usage and adoption is concerned?

The Response Of African Governments To Bitcoin

As far as technology is concerned, Africa has not been the world’s center of innovation. Africa has usually tended toward slow adaptation to change and adoption of new technologies. Once adoption sets in, though, it tends to explode and outstrip the usage of the same technologies in other climes. 

However, governments in Africa have traditionally been apathetic toward new technologies. They tend to lag in harnessing their potential and generally leave the ecosystem’s development for these emergent technologies to the populace. 

This has been the story of Bitcoin and cryptocurrencies in Africa, as governments in the continent have been very slow in understanding or harnessing the potential of distributed ledger technology. Indeed, some African governments tend to view emergent technologies with suspicion. Such has been the case with Bitcoin. 

We can also see a similar pattern being used by the African governments in cases of forex trading, which is basically regulated only in South Africa by the Financial Sector Conduct Authority (FSCA) and newly in Kenya by the Capital Markets Authority (CMA). No other African countries have shown any significant interest in regulating this field of business, despite its continued growth in all African countries.

Many central banks have issued warnings about using bitcoin and other cryptocurrencies, even when no express laws or regulations are banning their use in those countries. Perhaps it is apt that this is the case; without centralized direction, the African population is now driving the decentralized use of bitcoin and other blockchain-based products.

What Drives Bitcoin Adoption And Use In Africa?

Perhaps the primary reason for the heavy usage of Bitcoin on the continent is the need to power transactions outside of the traditional banking system. Banking laws in Africa tend to be elitist, restrictive and do not make for the general populace’s effective participation. That is why many African countries have large unbanked populations, which has made mobile payment systems and many fintech apps that aim to drive financial inclusion runaway successes. 

Access to foreign exchange for trade and international transactions is another factor that has driven Bitcoin usage through the roof. In countries like Nigeria and South Africa, where strict controls over foreign exchange movement across the banking system are in place, those involved in international trade are now turning to Bitcoin to facilitate their cross-border deals. 

In 2020, Nigeria was faced with a severe shortage of foreign exchange and was forced to cap international transactions done on point-of-sale terminals and ATMs outside of the country using the local ATM cards at a monthly limit of $100. Small scale importers that typically shop from Alibaba and other trade sites had no option but to seek alternative means of doing business. Bitcoin was a ready alternative, accepted by both shopper and vendor.

Africa can also be said to be on the fringes of the global financial system. Complete access to international online payment systems such as PayPal is restricted. South Africa is the only African country where users can pay and receive payments on PayPal. This situation has driven the need for the development of alternative payment systems. By a mistake of design, a globally-accepted payment means such as Bitcoin that can be converted to fiat in many countries has stepped in to fill this gap. 

Bitcoin Usage And Adoption In Africa In 2020

The ownership, usage and volume of trades in bitcoin and other cryptos saw a massive surge in Africa in 2020. Nigeria, South Africa and Kenya led the charge in this regard and feature among the top-ten countries where Google searches about crypto are highest. 

In Nigeria, most of the previous usage of Bitcoin was dominated by small-scale, peer-to-peer (P2P) traders, looking to buy and sell bitcoin for other cryptocurrencies and fiat currencies using escrow-based exchanges or face-to-face transactional modes. 2020 brought an evolution of the situation. International traders, importers and exporters seeking to bypass the Central Bank of Nigeria’s foreign exchange controls have found Bitcoin as a suitable alternative. 

Kenya’s advancements in mobile payment systems have given it an edge over other African countries in terms of using alternative payment systems for e-commerce transactions. The coming of Bitcoin has seen Kenya increasing that edge. A BBC report indicated that the acceptance of cryptocurrencies for commercial payments in Kenya has surged. According to data from Paxful, cryptocurrency transaction volumes on its exchange from Kenya grew 400 percent compared to the same period last year. Recognizing Kenya’s cryptocurrency market’s potential, the tax authorities there have introduced a digital tax to enhance the government’s revenue.

What Does This Mean For Bitcoin In Africa In 2021 And Beyond?

Major players in the distributed ledger technology space have noticed the growth of the ecosystem in Africa. Several cryptocurrency exchanges are either setting up shop in several African countries or merging with smaller domestic players to increase their footprint. 

Binance has established a significant presence in Nigeria, and South African exchange ChainEx attracted funding interest from Malta-based exchange OKEx. M-Pesa, which had runaway success in Kenya’s mobile money market, is in Ghana with its BitPesa exchange. These are just a few of several emerging partnerships in the crypto space in Africa.

The United Nations has also identified Africa as the next frontier for cryptocurrency adoption and usage. P2P transactions are expected to grow in 2021. A June 1, 2020 research document published by Bitcoin KE identified Africa’s P2P market as worth over $54.8 million, with Nigeria dominating the space with $35.5 million in transaction value as of June 2020. Nigeria will retain its dominance in the P2P space. 

Kenya is expected to lead the charge of cryptocurrency use for the purchase of goods and services. South Africa remains the top destination for the trading of cryptos as derivative assets on exchanges. 

Meanwhile, Seychelles is an African island in the Indian Ocean that will build on its previous reputation as one of Africa’s financial trading hubs. It is positioning itself as a hub for developing blockchain projects, much like Malta and Switzerland. 

Africa looks set to witness even more explosive growth in use and adoption of bitcoin and other cryptocurrencies in 2021 and beyond.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post How The Use Of Bitcoin In Africa Continued To Grow In 2020 appeared first on Bitcoin Magazine.

Source: Bitcoin magazine