Crypto trading, or cryptocurrency trading, is the exchange of cryptocurrencies either through a regulated Forex broker or through a cryptocurrency exchange trading platform.
Crypto trading, like Forex trading, involves the exchange of one currency for another. Cryptocurrencies can either be exchanged or traded for others, or they can be exchanged for fiat currencies, and vice versa.
According to an interview with forexsuggest.com, with the world moving steadily deeper into the digital age, and in recent years with advancements in technology, digital currencies have gained a substantial amount of leverage over fiat currencies, especially in Africa says Louis Schoeman CEO of SA Shares a crypto trading information platform.
Africa has been in the front row where online trading is concerned in the past few months, with cryptocurrencies becoming a favourite among various traders, and it is important to look at the factors that may have led to this explosion.
Cryptocurrencies can be traded 24/7 as opposed to the Forex Market which runs 24/5 – indicating a weekend gap in between. African traders can trade any time of the day, any day of the week without fear of closing positions before the trading day ends.
The Crypto Market is, next to the Forex Market, one of the easiest accessible as a lot of brokers and exchange platforms now cater for African traders and offer them with comprehensive and competitive trading conditions.
2. Lower transaction costs
The Crypto market is liquid as there are massive volumes being traded at any given time, which results in lower transaction costs.
There are less fees involved with crypto trading and this benefits a lot of traders, especially African traders greatly especially if they only have a small amount of capital available to start trading.
3. Cryptocurrency Market remains strong during Covid-19
During 2020, various markets have seen a sharp rise and fall due to the emergence and spread of Covid-19 on a global scale. Cryptocurrency trading, however, has seen a dramatic rise as there are numerous advantages in investing in cryptocurrency.
Cryptocurrency trading is also not as dependent on the same factors that influence other markets as cryptocurrencies cannot be controlled by governments or banking institutions.
Due to the great number of participants in the Crypto Market, it is one of the most volatile markets in the industry and when understood correctly, African traders can make use of strategies to harness this factor and increase their profits greatly.
Due to the volumes traded in the Crypto Market, the liquidity is greatly increased, and this means that transactions can be executed quickly and hassle-free. It also means that African traders can benefit from great prices, and faster order execution.
It also means that accurate technical analysis can be conducted without the market price being influenced.
Some other factors involved in effecting the crypt trading trends
It is not only the above mentioned factors the effects the crypto currency trends in Africa. But there are also several other factors that get combined with the above ones and produces a massive response. The political and financial situation of Africa plays an important role in that. And here is a list of some of the factors that has affected the trends of Crypto currency in Africa.
Lacking an organised financial system
The financial system of Africa is not much organised. People often face a lot of problems and banking related issues. In addition, the political governance also does not pay much attention to this lacking factor.
On the contrary to the banking system, the cryptocurrency does not need a banking channel. Instead of that, it can directly be received and sent to anyone around the globe. The only thing that you will need here is the internet connection. Therefore, people get attracted towards it and you won’t even need any bank or any middle man.
This is the major reason behind the explosive progress and up going trends of crypto currency being observed in Africa. Observing the trends, the crypto currency will have a massive response, which is beyond the legacy services and banks.
Availability of internet connectivity has driven the people towards the tech literacy. Especially the younger generation is most likely to be involved in the technical things. A great number of youth has been involved in freelancing. Therefore, as the freelancing pattern increases, the shift towards internet related jobs increased. This trend of going away from the traditional jobs has put the cryptocurrency ahead.
The tech driven youth of Africa has got contacts with the international community. And through these means, most of them also got into the cryptocurrency. It also seems like easy money and that attracted a lot of other people in to it.
Furthermore, the political governance of Africa did not really worked for the freelancers. This lack of interest of the governance resulted in creating a gap among the African youth and international community. They also do not have proper fund transfer platforms like “PayPal”. Therefore, the freelancers went towards accepting the cryptocurrency. It works fine or them. Because they do not have to depend upon anyone.
Stability of the cryptocurrency
In addition to the other factors, the stability of the cryptocurrency is also having a major role in enhancing its use. The political instability has resulted the hyperinflation in Africa. Because of these things, the local currency got a decline. But that is not a case with the digital currency.
The crypto currency is not bounded by the political boundaries. Therefore, the Bitcoin is immune to the economic turmoil of the countries. The people who have been suffering from hyperinflation of their nation’s currency, went towards the cryptocurrency and Bitcoin.
There are various reasons why crypto trading has seen a significant increase in Africa, especially over the past few months. And these factors have been mentioned above.
Cryptocurrency trading has become more common and popular especially in Africa and more traders are flocking to this market to reap the benefits and rewards thereof.