In the last decade, several nations around the world have experienced widespread economic crisis including experiencing inflation. Greece, Venezuela, Zimbabwe, Nigeria, etc. have all been victims of economic mismanagement. Often citizens of such countries resorted to unorthodox or newer methods of trading in order to hedge against their falling national currencies. In the recent days, South Africa has joined the list (as per a recent survey). Kantar TNS, on behalf of Luno had conducted a survey asking the major reason for investing in cryptocurrencies.
Luno, a London based cryptocurrency platform has recently conducted a survey (November 2018), which has found that South African citizens in significant numbers have been holding cryptocurrencies like Bitcoin, Litecoin etc., instead of the national currency the Rand. Most of them have reportedly been using them as a hedge against the ongoing inflation in the country.
The survey, which was conducted in 10 countries had a sample size of 1000 people in each nation. Out of the 1000 South Africans that took part in the survey, almost 69% of them are familiar with some cryptocurrency. Detailed breakdowns show that one third of them already own digital assets, while 53% are open to purchase them. The majority stated holding cryptocurrencies was a measure to hedge against the declining Rand.
Current South African Economic Scenario
Much of the economic crisis unfolding in South Africa can be attributed to the declining value of the Rand, which has experienced a 20 % decline against the Dollar in 2018. The reasons include political instability in the finance ministry of the country, financial mismanagement, and a loss of investor confidence.
As a result, a significant percentage of investors have started trading alternative instruments and have looked towards other investment options such as binary options, CFDs, Forex trading and cryptocurrencies. The survey has even found that an overwhelming majority of the participants welcome digital currencies as a viable payment option for online stores and even brick and mortar businesses.
Cryptocurrency Trading in South Africa
Ever since the popularity of cryptocurrencies as an investment option became known to South Africans, an overwhelming number of citizens have flocked towards investing in forex, trading binary options and of course, cryptocurrencies. Even popular binary options platforms such as IQ Option have started offering Cryptocurrency trading in the form of CFDs.
Choosing a reliable Forex/Cryptocurrency Broker Online
Both the Forex and cryptocurrency market require a certain amount of skill and knowledge to be successful. Due to their rising popularity, there have been an abundance of trading platforms offering users the same trading options. However, as an online trader, he/she must be careful while working with an online broker. There are certain factors which you can use to choose the right forex/ cryptocurrency broker when trading in South Africa, they include:
- Recognized by a National or International level Financial regulatory body
- Number of Leverage Options Offered
- Safety and Security Measures
- Demo Accounts Offered
- Level of Customer Service
South African Traders will find a good overview at http://www.tradeforexinsa.co.za/
As more and more countries are facing economic turmoil, citizens are turning towards cryptocurrencies as a viable solution. Many online trading platforms have started offering their own cryptocurrency trading options. This trend will continue so long as the South African Rand keeps declining and does not stabilize.