With a growth rate exceeding 1200% in crypto adoption in Africa, it is undisputedly the global champion in this field. This has allowed its countries to surpass some of the Top 10 most crypto-friendly countries last year.
Chainalysis found that the 1200% increase of incoming cryptocurrency volume in the past year was almost 50% more than the global average growth rate. The 880% increase recorded by the rest of the world combined was also impressive.
Africa’s cryptocurrency market has grown by more than 1200% in value in the past year. However, the region also boasts some of the most grassroots adoptions in the world with South Africa, Nigeria, South Africa and Tanzania all ranking among the top 20 in our Global Crypto Adoption Index.
Crypto-retailers are the new trend in Africa
Chainalysis reports that crypto adoption in Africa is most significant among non-institutional traders and retailers. This contrasts starkly with the scene in developed countries, where institutional investments are essential to the ecosystem.
Another chart shows how Peer-to-peer trading is very popular in Africa. This is way more than anywhere else in the world. Chainalysis reports that P2P trading is a significant factor in cryptocurrency adoption. This includes purchases and remittances, as well as financial transactions that use crypto to exchange money.
The country’s rapid adoption of cryptocurrency has been made possible by P2P trading. Chainalysis data, compiled by Useful Tulips shows that trading volume on LocalBitcoins has increased by over 80% since 2020. There is an increase in trading volume on P2P platforms other than traditional exchanges. This is because there is a preference to more private and informal channels like Telegram and Whatsapp.
Why are Africans so passionate about crypto?
Chainalysis reports that P2P platforms are starting to take market share away from exchanges such as Binance. Adedeji Owonibi is the CEO and founder of Convexity, a Nigerian blockchain consultancy firm. He says that centralized exchanges such as Binance are losing popularity as Africans move towards Paxful and other P2P platforms.
P2P platforms have become a popular way to transfer funds within Africa, as the continent is dominated largely by unbanked people. The report states that 96% of crypto transactions in Africa are linked to the remittance markets.
Chainalysis claims that Bitcoin and other cryptocurrency have offset the high cost of international transfers.
Artur Schaback is the Paxful COO. He explained to Chainalysis, that in addition to the cost, there are also legal restrictions that Africans can bypass through cryptocurrencies.
“If the government restricts the amount of money that can be sent abroad, people will turn to cryptocurrency. People can’t transfer money from their bank accounts into a central exchange in many of these frontier countries, so they rely upon P2P.
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