Sub-Saharan Africa has the smallest crypto economy of all regions in the world; however, Chainalysis Data has displayed a unique phenomenon in crypto adoption and penetration in the area in 2023.
The cryptocurrency market has been expanding rapidly in Africa as a whole; however, unlike other regions of the world, Africa is recording the highest number of sub-$1000 transactions, indicating Bitcoin’s ability to be used as a medium of exchange.
The digital asset space has sort of accepted the status quo that Bitcoin can only fulfill its intended function as a store of value. However, cryptocurrency adoption in Africa as a whole suggests otherwise. The study reveals that centralized exchange platforms were the most popular medium of crypto exchange in Sub-Saharan Africa, amounting to about half of all the transaction volume.
Despite the relatively low crypto market share of 2.3% of total transaction value globally, the region managed to transact close to $117.1 billion in on-chain value. Most of the transactions were under $1 million dollars, showing the African market is more retail-driven compared to any other crypto economy worldwide.
Between June 2022 and July 2023, Nigeria led the Sub-Saharan crypto economy, receiving close to $60 billion. South Africa and Kenya followed closely with approximately $23 billion and $9 Billion, respectively.
Why Sub-Saharan Africa is Displaying Interesting Crypto Trends.
The Sub-Saharan African economy is continuously accepting crypto as a mode of exchange. The Chainalysis report indicates interesting facts that insinuate the penetration of cryptocurrencies in day-to-day life.
According to analysis, several users within the Sub-Saharan regions are opting for cryptocurrencies like Bitcoin and Stablecoins as a way to mitigate against Inflation. The Statistics show that Bitcoin’s share of regional transaction volume within the time period of study is highest in Sub-Saharan Africa. Considering the entire regional transaction volume, Sub-Saharan Bitcoin’s share accounts for 9.3%, topping established regions like North America, with 9%, and Eastern Europe, with 8.2%.
It is clear that many sub-Saharan countries have struggled with rising inflation over the years. The Kenyan Shilling, South African Rand, and other African currencies have all had tough times against the dollar, pushing many residents to inflation-proof Bitcoin and other stablecoins.
Sub-Saharan residents are adopting Bitcoin and dollar-pegged stablecoins in order to escape inflation. Among the crypto-championing nations within the region is Nigeria, a country that deserves all the spotlight regarding crypto adoption.
Nigeria is not only leading in sub-Saharan Africa; it is among the only countries that recorded a growing crypto economy by transaction value year after year.
