In recent years, South Africans have engaged in cryptocurrency trades worth hundreds of billions of rands, mirroring the global surge in crypto interest within the nation. Popular digital tokens such as Bitcoin, Ethereum, and XRP have operated as decentralized currencies, devoid of a central authority like a reserve bank. These currencies predominantly employ blockchain technology, which ensures their security by maintaining a record of previous token owners.

Cryptocurrency’s appeal varies, with some viewing it as an alternative to conventional currencies, while others treat it as a speculative investment, hoping for future value appreciation.

Prominent Indicators of Growth

Christo de Wit, Luno’s South African Country Manager, noted that nearly 70% of the digital currency traded on Luno originates within South Africa. He confirmed a total trade value of R655 billion over Luno’s decade-long history. It’s important to note that trade volume doesn’t necessarily equate to total crypto investment, as frequent traders engage in numerous daily transactions, leveraging crypto’s market fluctuations.

Samantha Fuller, Head of Communications for the Middle East and Africa at Binance, a global crypto provider, provided insights into the remarkable surge in account registrations on their platform. She highlighted a 51.1% increase in active users on Binance in May 2023 compared to the previous year. The two-year trend in new registrations showed an impressive 58% year-on-year rise.

Fuller observed, “South Africa’s cryptocurrency adoption has undergone significant growth.”

Don Kruger, EasyEquities’ Head of Crypto Product, explained the R500 million in assets under management held by their EC10 coin, which provides investors with a diverse selection of the top ten cryptocurrencies by market cap. Easy Crypto provides a variety of cryptocurrency products, and many South African customers include bitcoin exposure in their portfolios as a routine practice.

Revix, a crypto asset provider founded by CEO Sean Sanders in 2019, has received over R4 billion in deposits. Revix specializes in crypto bundles and has a mature user base aged 35 to 40, with an average deposit size of R15,000. Sanders reported a user distribution of 65% male and 35% female.

Drivers of Behavior

De Wit attributed trading volume spikes on Luno primarily to price volatility, emphasizing that cryptocurrency adheres to the fundamental principles of supply and demand. Additionally, he highlighted that sentiments related to regulatory updates, security incidents like hacks, and breaches adversely affect trust in cryptocurrency, subsequently influencing trading volumes.

Revix and EasyEquities observed a preference for longer-term investment strategies among their crypto clients. Sanders noted that Revix users exhibit a penchant for long-term investment, using crypto as a diversification asset within their portfolios. He highlighted impressive monthly user retention rates of 98% to 99%.

Kruger echoed this sentiment, indicating that Easy Crypto’s clientele leans toward diversifying their portfolios with crypto assets instead of chasing short-term market movements. The platforms’ behaviors diverge from those platforms predominantly populated by day traders, showcasing a more measured approach to the market.