Digital tokens such as Bitcoin, Ethereum, and XRP, are decentralised currencies, meaning there is no central authority, such as a reserve bank that controls the supply of the currency. Photo Unsplash
Digital tokens such as Bitcoin, Ethereum, and XRP, are decentralised currencies, meaning there is no central authority, such as a reserve bank that controls the supply of the currency. Photo Unsplash

Billions of digital currency traded

SA’s crypto craze
The key drivers of purchasing and trading behaviour differed based on the platform.
William Brederode - Hundreds of billions of rands worth of cryptocurrency have been traded by South Africans in recent years as the global crypto craze has taken hold in the country.

News24 spoke to multiple market-leading South African crypto asset providers to get a sense of the scale of their operations.

The companies provided a host of different metrics that provide an indication of the growth of cryptocurrency adoption in South Africa. South Africans also seem to use cryptocurrency differently on various platforms.

Digital tokens such as Bitcoin, Ethereum, and XRP, are decentralised currencies, meaning there is no central authority, such as a reserve bank that controls the supply of the currency.

Most cryptocurrencies make use of blockchain technology which secures the digital currency by keeping a record of the previous owners of the token.

Some people believe in the intrinsic use case of cryptocurrency as an alternative to traditional currencies, while others are putting money into digital currencies as a speculative investment with the hopes that the currency increases in value in the future.

Key growth indicators

Christo de Wit, Luno's country manager for South Africa, said that close to 70% of the digital currency that has been traded on Luno, has been in South Africa, and confirmed that R655 billion has been traded in total on Luno over its 10-year history.

Luno is a crypto asset provider that operates internationally and has a large presence in South Africa.

De Wit stressed the fact that the trade volume is not an indication of total crypto investment as many traders make hundreds of trades per day, buying and selling crypto and betting on its movements.

"Crypto traders follow different strategies and will therefore continue trading, regardless of whether prices rise or fall. Similar to equity and foreign currency traders, many crypto traders place hundreds of trades per day, trading high volumes at low margins," said De Wit.

Samantha Fuller, the head of communications in the Middle East and Africa at Binance, an international crypto provider, provided data on the sharp increase in account registrations on Binance.

Fuller said that active users on Binance increased by 51.1% in May 2023 compared to the year before.

The trend of new registrations over the last two years also shows a positive 58% year-on-year increase.

"South Africa has experienced significant growth in cryptocurrency adoption," said Fuller.

Variety

Don Kruger, the head of product for crypto at EasyEquities, said that their EC10 coin, which offers investors a basket of 10 of the biggest cryptocurrencies by market cap has a total of R500 million of assets under management.

There are a variety of crypto products available through the Easy Crypto platform.

Kruger said that many South Africans using their platform have some cryptocurrency exposure as part of their portfolio. "A modest level of crypto is becoming commonplace in the diversified investment portfolios of the average South African," he said.

Sean Sanders, the CEO of Revix, who launched the crypto asset provider in 2019, said that the company has received over R4 billion in deposits.

Revix specialises in crypto bundles, where multiple tokens are bought through one product, which Sanders said has attracted a more mature user base to their platform, as the average user is between the ages of 35 and 40.

He said that the average deposit size is R15 000, and that roughly 65% of their user base are male and 35% female.

Behaviour drivers

De Wit said that price volatility is the strongest single driver of trading volume for Luno. In this sense, cryptocurrency follows old-fashioned principles of supply and demand, he said.

In addition to this though, he said that perceptions around regulatory updates and sentiment, and security incidents such as hacks or breaches negatively impact trust in cryptocurrency which influences trading volumes.

Revix and EasyEquities reported that their crypto clients seem to be taking a longer-term investment approach.

"Revix users are considered long-term investors that utilise crypto as an asset class that provides diversification to their investment portfolios rather than short-term trading. This is reflected in the platform's high monthly user retention rates averaging 98%-99%," said Sanders.

Term

Kruger also pointed to a longer-term approach being followed amongst investors in Easy Crypto products.

"We’re seeing behaviour more focused on diversifying their overall portfolio with crypto assets rather than making quick market moves."

"A fair amount of the aggregated behaviour we're seeing isn't drastically swayed by short-term market conditions, setting us apart from platforms that might have a higher percentage of day traders," he said.

News24 also reached out to crypto-trading platform VALR for comment, but did not receive a response by the time of publication. – Fin24

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LaLiga: Leganés 0 vs 2 Athletic Club | Real Betis 2 vs 1 Getafe | Mallorca 1 vs 0 Real Sociedad SerieA: Cagliari 0 vs 2 Empoli Katima Mulilo: 25° | 39° Rundu: 20° | 39° Eenhana: 17° | 36° Oshakati: 15° | 34° Ruacana: 16° | 35° Tsumeb: 19° | 34° Otjiwarongo: 13° | 32° Omaruru: 14° | 32° Windhoek: 11° | 28° Gobabis: 9° | 30° Henties Bay: 11° | 18° Wind speed: 22km/h, Wind direction: W, Low tide: 06:23, High tide: 12:53, Low Tide: 19:02, High tide: 01:16 Swakopmund: 12° | 14° Wind speed: 22km/h, Wind direction: NW, Low tide: 06:21, High tide: 12:51, Low Tide: 19:00, High tide: 01:14 Walvis Bay: 11° | 17° Wind speed: 23km/h, Wind direction: N, Low tide: 06:21, High tide: 12:50, Low Tide: 19:00, High tide: 01:13 Rehoboth: 7° | 29° Mariental: 7° | 26° Keetmanshoop: 6° | 24° Aranos: 6° | 27° Lüderitz: 14° | 27° Ariamsvlei: 6° | 23° Oranjemund: 15° | 30° Luanda: 22° | 24° Gaborone: 11° | 17° Lubumbashi: 18° | 36° Mbabane: 8° | 9° Maseru: 3° | 13° Antananarivo: 11° | 28° Lilongwe: 21° | 31° Maputo: 14° | 15° Windhoek: 11° | 28° Cape Town: 10° | 21° Durban: 13° | 14° Johannesburg: 7° | 9° Dar es Salaam: 23° | 29° Lusaka: 21° | 34° Harare: 17° | 30° Currency: GBP to NAD 23.27 | EUR to NAD 19.54 | CNY to NAD 2.48 | USD to NAD 17.5 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.28 | EGP to NAD 0.35 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.65 | ZWL to NAD 0.04 | BRL to NAD 3.16 | RUB to NAD 0.19 | INR to NAD 0.21 | USD to DZD 132.02 | USD to AOA 927.77 | USD to BWP 13.17 | USD to EGP 48.46 | USD to KES 128.48 | USD to NGN 1593.37 | USD to ZAR 17.47 | USD to ZMW 26.45 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1831.97 Down -0.38% | Casablanca Stock Exchange (CSE) MASI 14246.86 Up +0.44% | Egyptian Exchange (EGX) 30 Index 30937.69 Up +1.96% | Botswana Stock Exchange (BSE) DCI 9651.25 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 619.56/OZ UP +1.25% | Copper US$ 4.30/lb DOWN -0.004 | Zinc US$ 2 884.80/T DOWN -0.23% | Brent Crude Oil US$ 74.59/BBP DOWN -0.004 | Platinum US$ 976.62/OZ DOWN -0.0062 Sport results: LaLiga: Leganés 0 vs 2 Athletic Club | Real Betis 2 vs 1 Getafe | Mallorca 1 vs 0 Real Sociedad SerieA: Cagliari 0 vs 2 Empoli Weather: Katima Mulilo: 25° | 39° Rundu: 20° | 39° Eenhana: 17° | 36° Oshakati: 15° | 34° Ruacana: 16° | 35° Tsumeb: 19° | 34° Otjiwarongo: 13° | 32° Omaruru: 14° | 32° Windhoek: 11° | 28° Gobabis: 9° | 30° Henties Bay: 11° | 18° Wind speed: 22km/h, Wind direction: W, Low tide: 06:23, High tide: 12:53, Low Tide: 19:02, High tide: 01:16 Swakopmund: 12° | 14° Wind speed: 22km/h, Wind direction: NW, Low tide: 06:21, High tide: 12:51, Low Tide: 19:00, High tide: 01:14 Walvis Bay: 11° | 17° Wind speed: 23km/h, Wind direction: N, Low tide: 06:21, High tide: 12:50, Low Tide: 19:00, High tide: 01:13 Rehoboth: 7° | 29° Mariental: 7° | 26° Keetmanshoop: 6° | 24° Aranos: 6° | 27° Lüderitz: 14° | 27° Ariamsvlei: 6° | 23° Oranjemund: 15° | 30° Luanda: 22° | 24° Gaborone: 11° | 17° Lubumbashi: 18° | 36° Mbabane: 8° | 9° Maseru: 3° | 13° Antananarivo: 11° | 28° Lilongwe: 21° | 31° Maputo: 14° | 15° Windhoek: 11° | 28° Cape Town: 10° | 21° Durban: 13° | 14° Johannesburg: 7° | 9° Dar es Salaam: 23° | 29° Lusaka: 21° | 34° Harare: 17° | 30° Economic Indicators: Currency: GBP to NAD 23.27 | EUR to NAD 19.54 | CNY to NAD 2.48 | USD to NAD 17.5 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.28 | EGP to NAD 0.35 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.65 | ZWL to NAD 0.04 | BRL to NAD 3.16 | RUB to NAD 0.19 | INR to NAD 0.21 | USD to DZD 132.02 | USD to AOA 927.77 | USD to BWP 13.17 | USD to EGP 48.46 | USD to KES 128.48 | USD to NGN 1593.37 | USD to ZAR 17.47 | USD to ZMW 26.45 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1831.97 Down -0.38% | Casablanca Stock Exchange (CSE) MASI 14246.86 Up +0.44% | Egyptian Exchange (EGX) 30 Index 30937.69 Up +1.96% | Botswana Stock Exchange (BSE) DCI 9651.25 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 619.56/OZ UP +1.25% | Copper US$ 4.30/lb DOWN -0.004 | Zinc US$ 2 884.80/T DOWN -0.23% | Brent Crude Oil US$ 74.59/BBP DOWN -0.004 | Platinum US$ 976.62/OZ DOWN -0.0062