Today, Africa is seen as one of the hottest bitcoin destinations in the world, characterized by increasingly surging engagements in the crypto space. As more Africans have continued to adopt the use of cryptocurrencies for financial transactions, we have seen how it has translated to some form of economic growth and financial prosperity for crypto owners and traders. This progressive rate of cryptocurrency adoption is opening up diverse streams of income generation paths for Africans, and more adoption would mean even bigger harvests of financial rewards for Africa’s crypto merchants.
Popularly, one of the major ways to generate income via cryptocurrencies is to trade them for profit. If the crypto conversation in Africa continues to wax stronger, more Africans could be able to achieve financial freedom by exploiting short-term opportunities in cryptocurrencies. This is simply the act of trading cryptocurrencies. An increased crypto adoption would expand the market size for cryptocurrency trading, ultimately increasing access to trading opportunities. With more Africans owning cryptocurrencies, it would be easier for an increased number of Africans to tap into the stream of income that could be unlocked from trading cryptocurrencies, thereby, earning additional income by buying and selling their crypto coins or utilizing a Contract For Difference (CFD).
Cryptocurrencies could also offer a long term system of wealth creation through investments in cryptocurrencies. This also involves trading cryptocurrencies, but with a long-term perspective. Buying and holding crypto for some time has risen to become a wealth creation path for many of the active crypto players in Africa and Nigeria, particularly. Recently the Bitcoin attained an all-time high of about $34,000 for 1 BTC, a 305% increase over the past year. This indicates the promising potential of cryptocurrencies as investment assets, with very attractive returns on investment.
Beyond trading cryptocurrencies for wealth generation, the plethora of blockchain-powered financial services that can be built with cryptocurrencies are also capable of positioning Africans towards the path of economic prosperity.
Currently, a lot of Africans do not enjoy the benefits of financial inclusion because existing traditional financial systems are incapable of ensuring that everyone enjoys inclusive access to financial services. With emerging disruptive financial technologies like Decentralized Finance (DeFi), Africans can enjoy permissionless easy access to financial services, helping the many low-income inhabitants and SMEs that exist within the continent to access the financial services that they require to attain financial prosperity in their economic endeavours.
The growth of businesses within Africa is a critical indicator of financial prosperity within the continent. Most of the financial services available to help African businesses scale and grow can be significantly improved with crypto-powered services. For example, in fundraising for businesses, the utilization of Initial Coin Offerings (ICOs) can help more African businesses access funds to grow their businesses in an easier way than most existing fundraising systems offer. An ICO offers businesses a way to raise funds through the creation and exchange of digital tokens, without equity commitments. This is a much flexible way for businesses to raise funds, and can ultimately open up more innovative paths to the provision of resources for the sustenance of the growth of several African businesses. With the growth of businesses within Africa, the creation of more jobs and access to increased income will inevitably follow.
This year, Africa is set to commence the African Continental Free Trade Area (AfCFTA), which would immensely transform trade and commercial activities within the continent, adding several trillions of dollars to the economic value of the continent. There is no doubt that payment is a crucial aspect of the AfCFTA, since it depends on an efficient payment system to scale. For the AfCFTA and the tons of financial transactions that occur within Africa, leveraging cryptocurrencies for payments, will undoubtedly be greatly beneficial. This is because cryptocurrency-powered payment systems provide better cost-effective and easier cross-border remittance and trade, faster financial transactions and can even directly offer an increase in the value of the payment received by recipients, since most cryptocurrencies experience a significant increase in their value. Leveraging cryptocurrencies for as a payment medium in Africa, when properly harnessed, is, therefore, capable of facilitating financial prosperity for all inhabitants of the continent.
When Africans embrace and utilize cryptocurrencies, it would be possible for financially trapped Africans to escape the grave economic consequences associated with hyperinflation, rapid devaluation of their local currencies and other adverse effects that result from the decisions of central authorities like the government and Central Banks. With a crypto-powered economy, Africans would be able to enjoy a more shock-absorbant economic system.
However, all these benefits of cryptocurrencies, and their potential to offer financial prosperity all across Africa is dependent on the rate of adoption of cryptocurrencies within the region. If Africans object to adopting cryptocurrencies, it would be almost impossible to enjoy any of these benefits. However, with Africa’s increasing adoption of cryptocurrencies, financial freedom and prosperity could be more feasibly achieved in the near future across various African nations.