Economic Uncertainty In South Africa Boosts Bitcoin’s Popularity
SOUTH AFRICA:
The problem of land reform in South Africa has become an issue for the election of new president Cyril Ramaphosa last month. It remains a highly politicized topic alongside racial lines even 20 years after apartheid was demolished.
Now Ramaphosa’s party, the ruling African National Congress (ANC), has vowed to modify the constitution, permitting white-owned assets to be taken without compensation and redistributed to blacks who don’t own any farmland.
This promise has unnerved Goldman Sachs and, especially Moody’s, which gives international financial research on bonds issued by business and government entities. On Wednesday, the newly elected president reassured the economic ratings firm that this kind of move will not have a negative effect on South Africa’s economy.
“President Ramaphosa reaffirmed that accelerated land reform will unfold within a clear legal framework and without negatively affecting economic growth, agricultural production and food security,” the president said on one of his statements.
In addition to the issues are other economic problems that include a high unemployment rate of over 25%, the latest demise of the country’s VBS Mutual bank amid a “severe liquidity crisis,” in addition to the highest rate of economic crime (77%) in the world, according to PwC’s biennial Global Economic Crime Survey.
For those who’ve been into Bitcoin since Cyprus’s banking crisis of 2012-13 (no longer to mention the resulting spike in BTC price), South Africa’s soaring interest in Bitcoin probably wont be a surprise.
Google trends latest data shows that South Africa has recently moved up to the top spot when it comes to research on bitcoin.
Furthermore, Mati Greenspan, market analyst at eToro, mentioned that there was a significant surge of South African Bitcoin traders on the platform amid the heightened political pressures last year.
Greenspan said: “In South Africa, the number of new users trading bitcoin through eToro rose by 671% from January to the end of November last year over the same period in 2016, more than the 574% overall growth.”
“The best thing to do in a financial meltdown is to diversify your portfolio,” Greenspan explained in an interview with Bitcoinist. “Adding a small amount of crypto-assets can add exposure to something that is generally unconnected to the rest of the markets.”
The trend is supported by means of rising volume on LocalBitcoins, a global peer-to-peer Bitcoin trading platform. Statistics shows that there was a massive increase in bitcoin buying for over the past year comprising over 20 million ZAR ($1.7 million USD) since last week.
The Wall Street Journal reports that South Africa is also not the only African country where Bitcoin is viewed as a haven from political and economic turmoil. Sudan and Kenya have also seen a surge in Bitcoin since last year.
