Invest in Cryptocurrency in South Africa – What You Need To Know
Learn how you can make more informed decisions when investing in cryptocurrency in South Africa.
Although cryptocurrencies are a new asset class, it is no secret that the price of many cryptocurrencies has surged over the past few years. If you’re looking for a guide on how to invest in cryptocurrency and why should you invest in cryptocurrency, you’ve come to the right place.
Why should you invest in cryptocurrency?
Great question! It has been said that not only are cryptocurrencies here to stay, but they are also going to change the world and pave the way for the future of finance globally. If cryptocurrencies manage to achieve real-world adoption, only the sky is the limit.
Considering that only around 1-2% of the population owns cryptocurrency, we are still very early! Cryptocurrencies have shot up in value over the past few years due to the rapid increase in demand. In fact, Bitcoin was announced as the best performing asset of the last decade!
It’s also worth noting that as with any investment endeavor, the best approach is to do your own research before hand! Learn the fundamentals, potential risks involved, and everything in between to make sure you make informed decisions.
With that said, below are some more highlights and reasons why you may consider investing in cryptocurrencies in South Africa:
Cryptocurrency combats high South Africa remittance fees
Every year, thousands of South Africans with transferable work skills seek work in more affluent countries.
At the same time, there is a high level of immigration into South Africa from surrounding countries to fill skilled worker shortages.
Having a large diaspora population means that money transfers in and out of South Africa are common. At present, though, remittance fees on South African money transfers are some of the world’s highest.
- When sending money to South Africa, remittance fees can equal up to 12% of the amount of cash being transferred.
- On average, most remittances to South Africa in 2019, saw South Africans pay fees equivocal to 7.3% of transaction amounts.
- High remittance fees still apply when sending money to or from neighbouring African countries.
Thankfully, cryptocurrencies like Bitcoin provide a solution to South Africa’s remittance fee problem. This is thanks to the fact that using coins like Bitcoin to transfer cash, can cost South Africans as little as a few cents.
Many businesses in South Africa have started using Bitcoin and other cryptocurrencies
In South Africa, high local remittance fees don’t just affect individuals receiving money from overseas. As well as this, high-fees also affect local businesses.
At present, the volatility of the South African rand puts South African businesses at a disadvantage when buying or selling goods overseas. This is why several South African businesses have already started to accept Bitcoin or other cryptocurrencies as payment methods.
At present, notable businesses using cryptocurrency in South Africa include:
- RunwaySale – South Africa’s largest online fashion sales store offering members exclusive 70% discounts on major fashion labels.
- Earthchild – A homegrown South African fashion retailer specializing in organic cotton casual wear.
- Cape Coffee Beans – South Africa’s most popular online coffee bean distributor.
- weFix – South African repairers of all kinds of consumer smart devices, including popular Apple products.
- Takealot.com – South Africa’s largest homegrown e-commerce store.
In the majority of cases, businesses don’t just invite consumers to pay with cryptocurrencies. As well as this, businesses like weFix use cryptocurrency to source inventory from overseas suppliers. In doing so, they significantly reduce their inventory procurement costs.
Promising asset for investment and trade in South Africa
Globally, the majority of people who buy cryptocurrency do so to invest or trade cryptocurrency. However, in South Africa, people don’t just buy coins like Bitcoin in the hope to get more money one day.
At Easy Crypto, we see many people buy coins like Bitcoin to safeguard the value of wealth they have already.
- Coins like Bitcoin often perform better against the U.S. dollar than the South African rand.
- By investing in cryptocurrency, South Africans can save without having to worry about the value of their savings decreasing due to inflation.
New to crypto? Visit our learning Hub.
Different approaches to invest in cryptocurrency
There are multiple ways that you can invest in cryptocurrencies. Two popular methods people tend to go with include long term investing and day trading. It is entirely up to you to decide which strategy will work best for you. Here is our guide on investing in cryptocurrency:
- Long term investing refers to buying cryptocurrency and ‘hodling‘ them for months/years. This reduces your risk as you do not need to worry about daily price fluctuations that occur in the cryptocurrency markets. To give you an idea of how powerful this can be, R10 invested in Bitcoin in 2010 would be worth over R1.5 million today.
- In simple terms, day trading is profiting off of the volatility in cryptocurrency by buying low and selling high. Although this may sound simple, it’s important to realize that it’s generally the opposite. The cryptocurrency markets tend to be unpredictable in the short term. Most day traders lose more money than they make due to these unpredictable swings in the cryptocurrency markets.
Is there any risk when investing in cryptocurrency?
Just like any other investment, there is a certain level of risk when investing in cryptocurrency. Although there will always be a risk, you can take a few measures to try and reduce these risks as much as possible. Here are some tips from us:
- Understand what you are investing in. Don’t invest in any cryptocurrencies that you haven’t done extensive research on. If you’re not sure where to start, take a look at our learning Hub.
- Invest an amount that you are comfortable with. By doing this it’ll make it easier for you to worry less about the short term price fluctuations that the cryptocurrency markets experience.
- There are tons of scams out there that will try and get you to send them your cryptocurrency. Never send your cryptocurrency to anyone you don’t know. Never send your cryptocurrency to anyone claiming they can trade it to help you earn more. Only buy/sell cryptocurrency through a reputable exchange or broker, such as Easy Crypto 🙂
- Store your cryptocurrency on a safe and reliable wallet. Check out our guides on software and hardware cryptocurrency wallets for added security.
- Always remember that if it seems too good to be true, it probably is.
How to start investing in cryptocurrencies
Here at Easy Crypto, we make it easy for anyone in South Africa to buy and invest in cryptocurrency. To get started with Easy Crypto simply head over to our homepage to sign up and get your account verified.
Once your account is verified you will be able to invest in over 100 different cryptocurrencies with your South African Rand!
To buy cryptocurrency in South Africa with Easy Crypto, you can follow these easy steps below:
- Sign up
Start off by signing up using your email, Google account, or any of the other options we have available.
- Verify your account
To do this you’ll need to submit a picture of your South African ID, passport or drivers license. You’ll be able to start purchasing any cryptocurrency once the documents you submitted have been verified. This shouldn’t take long at all ????
For further information, you can visit the Easy Crypto’s account verification guidance with Sumsub.
- Make the order
The next step is deciding which cryptocurrencies you’d like to buy. Once you’ve done your research take a look at the cryptocurrencies we have to offer. Once you’ve decided which cryptocurrencies you’d like to buy, simply enter the amount you will be buying along with an address and then choose one of our payment methods.
You can currently choose between 3 different payment methods when buying cryptocurrency on Easy Crypto.
These include Stitch, Ozow and manual bank deposits. (Based on testing, we found that Stitch tend to be the faster payment method).
Disclaimer: Please be aware that digital assets, such as cryptocurrencies, tokens, and NFTs, are volatile and largely unregulated assets. It’s important to understand what you will be investing in, before you put your money at risk. Make sure to do your own research (DYOR) and make informed decisions. To learn more about cryptocurrencies, blockchain, NFTs, and more, head over to our Get Started page!