The cryptocurrency excitement reached fever pitch in 2017 as Bitcoin struck $20,000. Whether a Bitcoin maximalist or an altcoin aficionado, we were all in a state of euphoria. Then things changed. The market took on a downward spiral and interest in the industry took on a similar path. As we recently reported, interest in the industry has dropped by over 90 percent, with crypto sites’ Alexa rankings being on a free fall as well.
In Africa, the narrative is different. During the 2017 logic-defying ascension of the industry, Africa was lagging behind the other continents. The number of crypto traders on the continent was small, with a huge majority of people not aware of what cryptos were. This shielded many from the catastrophic losses many traders incurred last year. From a rise in the number of traders in 2018 to increased Google searches, Africa is moving in as the rest of the world shies away.
The Blessing In Disguise
Africa is not renowned for its swift adoption of technological innovations. For instance, as the Western world quickly adopted telephones, Africa lagged behind. Years later, smartphones took over and replaced the telephone. The Western world had already spent billions of dollars installing telephone cables, and the switch proved quite expensive. Africa, on the other hand, hadn’t taken to telephones. This made the move to smartphones quite easy for the continent’s one billion people.
Cryptos have taken a similar path and Africa’s slow adoption turned out to be a blessing in disguise. At first, the continent was apprehensive, with many governments warning their citizens against cryptos. The tone from the lawmakers has changed significantly, and so has people’s attitude to cryptos.
One company that has reaped the benefits of Africa’s rising interest in cryptos is peer-to-peer crypto trading platform Paxful. While the likes of Coinbase and Binance have seen a significant decrease in trading volume in 2018 as many traders exited the market, its been a different story for Paxful. The firm recently revealed to Coindesk that its transaction volume increased by 130 percent in 2018. Africa was the primary driver of the growth.
West Africa was its biggest growth region, doubling its users in Nigeria and tripling them in Ghana. African crypto traders on Paxful accounted for 41 percent of the new users in 2018. Paxful, which has offices in Hong Kong, New York and Manila now has African users accounting for 35 percent of its users.
The Need For Cryptos Is Greater
Cryptos enthusiasts all around the globe have continually pushed for an overhaul of the finance system. With a few entities having the power to control the supply of money, the system is skewed to the benefit of the elites. And while the benefits of crypto will impact on everyone, there’s a far greater need for the revolution in Africa.
The continent battles with many challenges, one of which is a lack of financial inclusion. Even for those with access to financial services, some of the basic functions such as funds transfer are quite costly. In fact, remittances to Africa are the most expensive in the world according to the World Bank, almost as twice as expensive as second-placed Asia.
Cryptos will therefore have a much greater impact in Africa than anywhere else. And while everybody else frets about the bear market, the continent is beginning to realize just how much faster, easier, cheaper and more convenient cryptos are. While it doesn’t currently have as big an impact as the other continents, Africa will certainly shape the future of cryptos in the not-too-distant future.
Circle is weathering crypto-winter like every other crypto company, says CEO; refutes valuation rumours
Jeremy Allaire, the CEO of Circle, spoke to Fortune Studios about the company’s activities, and plans for the future, while also discussing how the company weathered the crypto bear market over the years.
Allaire explained that all companies in the crypto business were undergoing the same issue as Circle, and that “business was down,” for all. He continued,“When there’s no volatility or prices are down, then volumes are down… We had very significant growth year last year, even though there was a crypto bear market.”
Despite the bear market however, Allaire revealed that the company’s user base and revenues had increased over the previous year. According to Fortune, Circle was valued at $3 billion, after it acquired the cryptocurrency exchange, Poloniex.
There were rumors of Circle’s valuation falling below $1 million after its lead investor, Bitmain, faced issues of its own, following the fall in crypto prices. Additionally, Circle’s shares were allegedly selling at a steep discount due to the collapse in prices.
Allaire however, refuted the rumors, stating,“I can’t comment on specific transactions or specific prices or things like that, but the way that was characterized was inaccurate. There are secondary platforms, people list the things they are offering… but that doesn’t mean they’re actually trading and the way that was characterized was inaccurate”
Circle closed its acquisition of SeedInvest, an equity crowdfunding site, earlier this month. The acquisition will allow Circle to get into the regulated sphere of issuing securities, which would become a major part of Circle’s business in the near future.
He added,“We’re going to look at ways that we can bring the benefits of digital assets, crypto technologies, and blockchains into this whole area of issuing securities over the internet.”
Allaire also spoke about Facebook’s stablecoin, adding that he looked forward to the competition, and that internet companies issuing cryptocurrencies was a good sign for crypto in the long term
Galaxy Capital-Backed Caspian to Offer Crypto Derivatives Trading
Galaxy Capital-backed institutional trading and portfolio management platform Caspian is launching trading in cryptocurrency derivatives.
Caspian announced Wednesday that it has integrated its platform with the Deribit exchange to offer futures and options (F&O) trading in crypto assets.
Deribit offers futures and options trading for bitcoin (BTC) and ether (ETH), and also provides another perpetual swap product for bitcoin. The exchange does not charge for deposits and withdrawals and “up to 100x leverage”, Caspian said.
Robert Dykes, Caspian CEO, said:
“Our goal at Caspian is to provide crypto traders and investors the same standard of tools and service that exist in the traditional markets.”
The Caspian platform is connected to Deribit through an application programming interface (API) that supports “high volumes with ultra-low latency,” and provides traders with access to Deribit’s full options order book, Caspian said..
Caspian is a joint project between Hong Kong-based cryptocurrency investment firm Kenetic Capital and the U.S.-based based trading systems firm Tora.
The project raised $16 million in funding via a token presale last September, with backing from Kenetic Capital, Galaxy Capital, Octagon Strategy, Global Advisors and others.
Kenetic Capital managing director David Wills called Caspian “a frictionless on-ramp for crypto traders” at the time.
Back in 2017, the Chicago Board Options Exchange (CBOE) and CME Group both famously launched futures products.
Financial markets technology platform LevelTradingField launched a cryptocurrency derivatives exchange last August using the ethereum blockchain. And, in December, cryptocurrency exchange OKEx launched a bitcoin derivative product with no expiry date, meaning that positions can be held indefinitely.
CoinMarketCap Crypto Indices Launch on Nasdaq, Bloomberg, Reuters
Two cryptocurrency benchmark indices from data provider CoinMarketCap will launch today on financial data feeds from Nasdaq Global Index Data Service (GIDS), Bloomberg Terminal, Thomson Reuters Eikon (Refinitiv) and Germany’s Börse Stuttgart, as well as on its own platform.
CoinMarketCap announced the news Wednesday, saying that the benchmark indices will be the “most comprehensive” crypto data offerings for the markets, covering the top 200 cryptocurrencies by market capitalization, one including bitcoin (BTC) and the other without.
The first index is named CMC Crypto 200 Index (CMC200), which includes bitcoin, and covers more than 90 percent of the global cryptocurrency market, the firm said.
The second, CMC Crypto 200 ex BTC Index (CMC200EX), tracks the market’s performance without the influence of bitcoin. The world’s largest cryptocurrency, bitcoin currently has just over 50 percent dominance of the total market capitalization.
“These indices will promote greater accessibility to cryptocurrency data in an easier-to-digest format,” said CoinMarketCap CEO Brandon Chez.
CoinMarketCap has partnered with Germany-based provider of financial indices Solactive for the effort, which will calculate and administer both the indices, as well as rebalance them on a quarterly basis, according to the announcement. Price data is being provided by CoinMarketCap.
Solactive’s head of sales Fabian Colin said that CoinMarketCap data would also give his firm the opportunity to develop custom indices for clients, adding:
“We are looking forward to developing more crypto indices in the future, which will optimistically result in investable indices and might lead to further products.”
Earlier this week, CoinMarketCap also added crypto asset letter grades to its platform from blockchain analytics startup Flipside. The Fundamental Crypto Asset Score (FCAS) metric developed by Flipside evaluates factors such as developer activity and a broad set of transaction data.