Controversies around cryptocurrencies have delayed their adoption as mainstream means of payments. South Africans, however, seem to be positive about them according to a recent sentiment survey conducted by Luno, SA’s cryptocurrency company.
82% of South Africans who hold cryptocurrency on the Luno platform expect the Bitcoin price to rise significantly, some believe as high as $100 000 (about R1.5 million). Bitcoin is trading at around $43 600 today after reaching $50 000 at the end of August.
More than 1 000 Luno customers in South Africa were surveyed in August along with customers in the UK, Indonesia and Malaysia. Marius Reitz, Luno’s GM for Africa, says the overall sentiment is extremely positive, with 61% of SA customers indicating their intention to hold their investment (hodl in crypto-speak) or buy any price dips over the next six months.
South Africans are most optimistic about Bitcoin and Ethereum.
Luno has seen an increase in active customers in South Africa, with the number of users who have bought or sold crypto on the platform up 140% in the past 12 months. Total Bitcoin trading volume across several exchanges in South Africa was around $25m traded in the past 24 hours, around 56% of which was on Luno.
Reitz cautions, however, against the perception of crypto investors as extreme risk-takers seeking only short-term gains. “Just 14% of South African customers say they plan to day-trade for short-term profit for the rest of the year. On average, existing South African customers are holding their crypto for eight months before cashing out. In addition, we are seeing more South African customers planning how to invest their money. Over the last three months, more than one in 10 (12%) of Luno’s active South African customers have made use of the repeat buy function, which allows you to automatically purchase a set value of crypto at daily, weekly or monthly intervals. On average they are buying around R400 worth of crypto a month.”
Luno’s South African data correlates with online global research by YouGov among 6 642 respondents across six countries. It reveals that, contrary to popular belief, not all people view crypto as a short-term, get-rich-quick opportunity and increasingly more investors hold it as part of a diversified portfolio. The national picture shows that the importance of having money is focused on long-term goals, most commonly to fund their family’s well-being (64% of SA respondents), for greater flexibility in life generally (55% of SA respondents) and save for their retirement (39% of SA respondents). In addition, South Africans indicating that banks (49%) and specialist financial media (36%) were trusted sources for investment decisions.
“New insights indicate that the stereotypes around cryptocurrency investors may not hold true. Instead, we are seeing that South Africans who own crypto are saving more regularly, have longer-term goals and are more financially savvy. Although we operate in over 40 countries, Luno views Africa as one of, if not the most promising region for the adoption of cryptocurrencies due to its particular combination of economics and demographics,” says Reitz.