In a fascinating financial twist, cryptocurrency, once perceived as the domain of wealthy nations and high-income individuals, is increasingly finding a home in Africa’s underprivileged nations.
Africa’s engagement with digital assets is escalating, despite the global market’s recent downturn and the stumbling of crypto giant FTX.
Digital assets: The unlikely heroes
Contrary to expectations, nations such as Namibia and Angola, generally regarded as impoverished, are outpacing their more affluent African counterparts, including Kenya and South Africa, in adopting and using crypto.
It appears the economic challenges are turning these countries into fertile ground for this unconventional asset class. In this dynamic setting, Africa demonstrates a strong awareness of crypto, with a substantial 66% of its population familiar with this burgeoning asset type, primarily through social media exposure.
However, cryptocurrency ownership is yet to catch up with awareness. A meager 8% of Africans claim to possess crypto, with an additional 10% having owned but subsequently divested.
A whopping 82% have never ventured into crypto ownership. The promising news here is the significant room for growth, as Africans show an increasing willingness to learn about, invest in, and benefit from crypto.
The role of government and education
Government support is seen as pivotal in facilitating the crypto revolution. In the surveyed 19 African nations, only seven currently exhibit crypto-friendly legislation, reinforcing the need for governmental backing to enhance cryptocurrency adoption and education.
Education holds significant potential to bridge the knowledge gap and facilitate the understanding of crypto. Income, strongly tied to educational levels, emerges as an essential factor to consider in audience segmentation for marketers targeting the African continent.
As more Africans become well-informed investors, they can utilize crypto as a potent asset class for purposes beyond immediate gain, such as retirement funding and family inheritance.
Furthermore, marketing campaigns should focus on familiarizing Africans with blockchain, DAO, and CBCD technologies, crucial components of the crypto space, currently relatively unknown.
The power of social media, coupled with increasing internet penetration, can play a critical role in disseminating information.
Demographics of crypto ownership
Crypto ownership shows intriguing variations across demographics. High-income earners are unsurprisingly more likely to own crypto, with 25% of those earning less than $1800 holding crypto, this figure skyrocketing to 87% for those earning between $1801 to $4500.
Gender and generational differences are less drastic. Men marginally outpace women in crypto ownership, with 19% versus 17% respectively.
Interestingly, Baby Boomers lead the charge with 20% adoption, followed closely by Millennials at 19%, with Gen X and Gen Z lagging slightly behind.
Crypto users in Africa are exhibiting optimism in the face of economic challenges, showing positive sentiment towards the crypto market, personal finances, and the overall economy. These optimistic views contrast sharply with non-crypto users, indicating the positive outlook that crypto can inspire.
The majority of African crypto holders tend towards short-term holding, reflecting perhaps the influence of COVID-19, which has triggered significant fluctuations in major cryptocurrencies.
As Africa’s journey with crypto continues, the story remains to be written, but the early chapters suggest an exciting narrative of innovation, education, and increased financial opportunities for the continent’s diverse population.
