African Crypto Adoption Increased by 1,200%

With a growth rate exceeding 1200% in the past year, Africa is undisputedly the global champion in crypto adoption. This has allowed its countries to take over part of the Top 10 most crypto-friendly countries.

Chainalysis found that the 1200% increase of incoming cryptocurrency volume in the past year was almost 50% more than the global average growth rate. The 880% increase recorded by the rest of the world combined was also impressive.

Africa’s cryptocurrency market has grown by more than 1200% in value in the past year. However, the region also boasts some of the most grassroots adoption in the world with South Africa, Nigeria, South Africa and Tanzania all ranking among the top 20 in our Global Crypto Adoption Index.

Crypto Pioneers in Africa

Chainalysis reports that crypto adoption in Africa is most significant among non-institutional traders and retailers. This contrasts starkly with the scene in developed countries, where institutional investments are essential to the ecosystem.

Another chart shows how Peer-to-peer trading is very popular in Africa. This is way more than anywhere else in the world. Chainalysis considers P2P trading as a significant factor in cryptocurrency adoption. This is in addition to purchases and remittances, as well as other financial transactions that use crypto as an exchange medium.

The country’s rapid adoption of cryptocurrency has been made possible by P2P trading. Chainalysis data, compiled by Useful Tulips shows that trading volume on LocalBitcoins has increased by over 80% since 2020. There is an increase in trading volume on P2P platforms other than traditional exchanges. This is because there is a preference to more private and informal channels like Telegram and Whatsapp.

Africa Getting Cozy with Cryptocurrency?

Chainalysis reports that P2P platforms are starting to take market share away from exchanges such as Binance. Adedeji Owonibi is the CEO and founder of Convexity, a Nigerian blockchain consultancy firm. He says that centralized exchanges such as Binance are losing popularity as Africans move towards Paxful and other P2P platforms.

P2P platforms have become a popular way to transfer funds within Africa, as the continent is dominated largely by unbanked people. The report states that 96% of crypto transactions in Africa are linked to the remittance markets.

Chainalysis claims that Bitcoin and other cryptocurrency have offset the high cost of international transfers.

Artur Schaback is the Paxful COO. He explained to Chainalysis, that in addition to the cost, there are also legal restrictions that Africans can bypass through cryptocurrencies.

If the government restricts the amount of money that can be sent abroad, people will turn to cryptocurrency. People can’t transfer money from their bank accounts into a central exchange in many of these frontier countries, so they rely upon P2P