Online Bitcoin Trading Takes Root in Africa

It is a well-documented fact that Africa has a huge number of unbanked, which in some countries goes beyond 70%, and also incurs very high costs of money transmission. It follows then that when Bitcoin is mentioned in the same breath as Africa, it is often as a technology that is in a position to help solve these problems.

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Online Bitcoin Trading Takes Root in Africa

It is a well-documented fact that Africa has a huge number of unbanked, which in some countries goes beyond 70%, and also incurs very high costs of money transmission. It follows then that when Bitcoin is mentioned in the same breath as Africa, it is often as a technology that is in a position to help solve these problems.

However, there is another opportunity in cryptocurrency that is attracting attention, at least in some quarters of the continent’s population. And that is being a source of income as a tradable currency online.

A few weeks ago I was added to a Kenyan Bitcoin Facebook group, where members share all manner of information on Bitcoin and other cryptocurrencies. And for the time I have been there, I noted that apart from how to get into mining, the other question that kept coming up is how one can trade Bitcoin online and generate income.

In line with this demand, TagPesa and BitPesa, two Bitcoin exchanges operating in Kenya have recently made efforts to facilitate online trading in bitcoins. Indeed, BitPesa did hold an event on February 13, 2015 dubbed ‘Hustle with Bitpesa’, which was specifically targeted at traders. Since then, the company has been holding similar events in other major towns around the country.

The same is being replicated in other African countries. The South African Bitcoin exchange ICE3X in January 2015 launched its services in Nigeria, which will help the locals buy and sell bitcoins using naira, the local currency.

ICE3X logo

New phenomenon

Of course, it would accurate to say that online trading in Africa is still in its early age. Online Bitcoin trading will probably furthermore remain marginal for many years to come even as internet penetration grows at a relatively high rate.

Nevertheless, there is some activity taking place in this area.

Tech-savvy, mostly young people in cities like Nairobi, Cape Town and Lagos are taking the initiative to learn the ropes. I must mention however that almost all of these pioneers are people who have been trading online before using other methods.

One perfect example of such a trader is Nelson Lemashon, a Kenyan, who has been trading currencies on the ForEx market for close to five years. He decided to venture into BTC in 2012, and he believes there is an opportunity for Africans in this area too.

Challenges

Lemashon acknowledges however that just like with other Bitcoin traders around the world, those trying it from Africa have to overcome a number of teething problems and other challenges.

“We have to face the challenges of not well-developed trading tools,” says Lemashon. “For instance, apart from BTC-e, few other bitcoin trading platforms have the MT4 software. Also in order to leverage on volume, you have to invest a larger amount of value as compared to when trading other currencies or assets."

African Digital Currency Association

Michael Kimani, a founding member of the African Digital Currency Association, thinks that more Africans are going to interact with Bitcoin through trading.

“It can happen as the means of moving money between local currencies and bitcoins are becoming available,” says Kimani

Indeed, it will take time for a vibrant community of online Bitcoin traders to grow. However, with the continent holding its first Bitcoin Conference on April 16-17, 2015, and a growing list of exchanges opening up shop on the continent, there is little doubt that it will happen.


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