Revival Of Cryptocurrency Industry In Africa Is Expected To Shift Gears
Recent moves by Nigeria and the expected endorsement of Bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission are projected to rekindle African demand in crypto. A crucial event for Bitcoin, the halving expected in April 2024, will once again dictate the course of the top digital asset in 2024.
Nigeria’s Fresh Take On Cryptocurrency: A Boost for the African Continent
Africa’s cryptocurrency and blockchain industry, which went through a tumultuous first half of the year marked by startup collapses and increased regulatory scrutiny, appears ready to commence 2024 on a positive note. This newfound optimism is most apparent in Nigeria.
The Central Bank of Nigeria has changed course substantially since the appointment of the new governor, Olayemi Cardoso. He has distanced himself from the controversial policies of his predecessor and is taking steady steps toward modernising the financial sector.
The highlight of Cardoso’s tenure so far is the removal of the restrictions related to cryptocurrency imposed in February 2021. The majority of Nigerian cryptocurrency influencers and stakeholders like Ophi Rume, from the Stakeholders in Blockchain Technology Association of Nigeria, agree that this is a monumental moment for not only Nigeria but also the entire African continent.
Initiative Seized by Southern African Countries in 2023
In Kenya, one of Africa’s leading economies with a robust cryptocurrency market, government action against Worldcoin has been viewed as the lowest point for the crypto industry. National security was cited as a reason for the freeze on Worldcoin’s activities.
Meanwhile, South Africa, another significant player in Africa’s cryptocurrency market, is taking steps to set up a regulatory framework. Angola’s adoption of a new crypto law and Zimbabwe’s launch of Africa’s first and only gold-backed digital currency are also expected to boost optimism among users and potential service providers.
The Impact of Bitcoin Halving and ETF Explosion
Despite all these developments in Africa’s crypto industry, industry insiders believe the SEC’s expected approval of Bitcoin ETFs could trigger another bull run and lead to a surge in capital influx.
Shaheer Karrim, co-founder of Mzansi Web3 ICP Hub, argued that while the ETF approvals are encouraging, they are likely to have a short-lived impact. He believes high-level institutions such as Blackrock will seek to take control of Bitcoin.
Ivaibi Festo, the founder of Mitroplus Labs, shares this sentiment. However, he emphasizes that the Bitcoin halving event in April 2024 would again be instrumental in determining the path of the top crypto asset in 2024.
Nathaniel Luz, an author and founder of Flincap, is of the opinion that the approval of Bitcoin ETFs could bring legitimacy to the crypto industry and help to rebuild user trust. He refutes the idea that average African crypto users are keenly interested in the technicalities of the SEC approval.
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Frequently asked Questions
1. What is a Bitcoin ETF and why is it causing a craze?
Answer: A Bitcoin ETF, or Exchange Traded Fund, is a financial product that tracks the price of Bitcoin and allows investors to trade it on traditional stock exchanges. The craze stems from the fact that it could provide a more regulated and accessible way for institutional investors to invest in Bitcoin, potentially increasing its mainstream adoption.
2. How could the approval of a Bitcoin ETF spark Africa’s crypto industry revival?
Answer: The approval of a Bitcoin ETF could bring increased attention and legitimacy to the cryptocurrency market globally, including in Africa. This could lead to a surge in interest among African investors and entrepreneurs, attracting more investments and fostering innovation in the region’s crypto industry.
3. What is Nigeria’s updated crypto position and how does it impact Africa’s crypto industry?
Answer: Nigeria’s updated crypto position refers to the recent decision by the Central Bank of Nigeria (CBN) to lift its ban on cryptocurrency trading. This development is significant for Africa’s crypto industry as Nigeria is one of the continent’s largest economies and has a vibrant crypto community. The lifting of the ban could reignite crypto activities in Nigeria, setting a positive precedent for other African countries and potentially boosting the entire continent’s crypto industry.
4. How does the approval of a Bitcoin ETF benefit African investors?
Answer: The approval of a Bitcoin ETF could benefit African investors by providing them with a regulated and secure way to gain exposure to Bitcoin’s price movements. It would eliminate the need for direct ownership and storage of Bitcoin, reducing the associated risks. Additionally, the increased legitimacy and accessibility of Bitcoin through an ETF could attract more institutional investors, leading to potential price appreciation.
5. What challenges could Africa’s crypto industry face despite the Bitcoin ETF craze?
Answer: Despite the Bitcoin ETF craze, Africa’s crypto industry may still face challenges such as regulatory uncertainties, lack of infrastructure, and limited access to banking services. These factors could hinder the growth of the industry and limit the benefits that a Bitcoin ETF might bring. It is crucial for African countries to develop clear and supportive regulatory frameworks and improve financial infrastructure to fully leverage the potential of the crypto industry.
6. How can African entrepreneurs seize the opportunities presented by the Bitcoin ETF craze?
Answer: African entrepreneurs can seize the opportunities presented by the Bitcoin ETF craze by focusing on building innovative crypto-related products and services. They can create user-friendly crypto exchanges, develop secure digital wallets, or provide educational resources about cryptocurrencies. By addressing the specific needs of the African market and leveraging the increased interest in Bitcoin, entrepreneurs can play a pivotal role in driving the growth of Africa’s crypto industry.
7. What are the potential long-term benefits of Africa’s crypto industry revival?
Answer: The revival of Africa’s crypto industry could bring several long-term benefits. It could boost financial inclusion by providing individuals with access to secure and affordable financial services, especially in regions with limited traditional banking infrastructure. Additionally, the growth of the crypto industry could attract foreign investments and foster job creation, contributing to economic development in Africa. Finally, it could position Africa as a global leader in blockchain and cryptocurrency technology, bringing further opportunities for technological advancements and partnerships.