Why you should invest in cryptocurrency
2020 has seen every corner of Africa buzzing with cryptocurrency news more than the usual. An undeniable cause has been the impact of COVID-19 on the Global Financial System; with African economies once more thrown into disarray with an overwhelming public burden and no resources with which to manage it.
But the coronavirus pandemic had another effect; showing the institutions and systems of the past to be incapable of actually working for the world when it was needed.
In this climate of inept governance and predatory banking, it is a relief that, to these problems too, cryptocurrency offers us a fresh, better, more honest alternative.
Africans are tired of the same old system that isn’t working for them. Despite several notices released by regulators, warning about Bitcoin and Cryptocurrencies not being accepted as legal tender, the utility to people, especially the youths - in terms of ease of sending money and as an investment option - drives them to engage with cryptocurrency, nonetheless. When the only other options they have will cost them more than they can afford, it stands to reason why they choose a system that is cheap, transparent and fast.
Earlier this year Google search data showed that in the world, Nigeria is the country that showed the most relative interest in Bitcoin. In August, Blockchain.com, revealed that since April 2020, Nigeria has increased its usage of the company’s web wallet by 60%.
As the safest crypto exchange platform in Nigeria, we also saw a lot of activities on Yellow Card with the majority of over 20,000 signups coming from Nigeria alone in August.
In this article, we will walk you through why you should consider investing in crypto in 2020 as well as how you can start if you have never traded bitcoin or any other crypto before.
Why Invest in Cryptocurrency
You may be wondering what exactly is the reason for the sudden hype around cryptocurrencies especially in this part of the world, but the truth is that Bitcoin and other cryptos have been around for a while now.
While only a few adopted these digital currencies early, today a series of events happening almost all at once have drawn in more people, which is why there has been so much recent interest in Bitcoin, Blockchain and the technologies they represent.
While we may not know everything little that led to cryptos blowing up in Africa in 2020, here are those things that we know certainly contributed to it:
1. The Global Pandemic
When the novel coronavirus hit the world earlier in the year, it exposed a lot of vulnerabilities in the existing system in various sectors, such as the financial sector. For those of us in Africa, we felt the impact the most as global economic crisis eventually led to inflation and currency devaluation in some cases. People lost their job and were grounded at home for months. Food supplies across the continent have been stretched to breaking point. This has not been pretty.
2. High transaction fees from traditional financial institutions
It’s not pleasant having to deal with high transaction rates that come with using banks or international money transfer agents. Nigerians periodically take to social media to protest and complain. And the lockdown that came with COVID-19 didn’t help.
Leaks like the FinCen Files have exposed billions of Dollars leaving Africa every day through these same banks tax-free - while ordinary Africans deal with the harsh burden of fees and taxes on their already strained resources.
3. A Plan for the future
It’s no news that the average Nigerian does not have an alternate source of income or a solid savings and investment culture. And, once again, the pandemic woke many up to this harsh reality - that depending on one source of income is not smart.
For these reasons and many others, it began to dawn on youths and the rest of the population that a proactive step must be taken to secure their future; and perhaps that's why you are here too. While regular investments like mutual funds are great options especially for passive investors, people have learnt an important lesson: diversify.
This is why the SEC in Nigeria’s recent ruling that crypto-assets are now legal in the country has got many people looking to understand why they should get into the crypto world. It has given people once sceptical about Cryptocurrencies the confidence to venture into it as an alternate source of income.
Hence, a simple reason why you should invest in cryptocurrency now is to protect your future. Over the last few years, we have seen the leaps cryptocurrencies have taken - from being a pastime for cryptography enthusiasts to offering massive utility in the financial world - and one can only imagine how much more relevant it will become in the coming years.
Think about what financial freedom means to you. At Yellow Card, we believe early cryptocurrency adoption is the most viable way to get there as soon as possible.