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Cryptocurrency Owners in South Africa Curious about Cryptic Crypto according to Research

Research provides some insight into how much South Africa’s cryptocurrency investors have

Discussions and debates around cryptocurrency and investing have been a regular occurrence at dinner parties, at work, and online, for some time, according to Tessa Nowosenetz (account manager at KLA, a market research and data specialist firm). Tessa Nowosenetz is account manager at KLA, a market research and data specialist firm.

Those who invested were considered to be risk-takers. Those who did not invest were more concerned about the possibility of a bubble burst.

The mainstream acceptance of cryptocurrency is growing, with El Salvador becoming the first country in the world to recognize it as a legal currency. However, there were some hiccups during its initial days of trading. Despite the fact that Elon Musk and other prominent public figures have promoted the pandemic, there has been renewed interest in its associated growth, according to Nowosenetz.

“With the crypto boom in South Africa, we decided to examine the attitudes and behaviour of South Africans towards cryptocurrency through our YouView Panel of consumers.”

Very High Interest, but serious investors numbers are low

According to Luno, 15% of South Africans are cryptocurrency-savvy. Nowosenetz stated that this is the second highest percentage worldwide.

According to our data, and a survey we conducted on the topic, numbers are higher with 25% stating that they have cryptocurrency between R100-R1,000.

This percentage is high but the amount of money invested is very low. This shows that most South African crypto investors are just trying out different things without making any significant financial commitments.

For serious investors, higher percentages

  • 13% of the cryptos have a value between R1,000 and R10,000
  • 6% of the crypto has a value between R10,0001 and R50,000
  • 3% of the crypto has more than R50,000 value

KLA also reported that 36% of respondents are interested in investing in crypto in the near future. KLA said these numbers, together with 25% of crypto-investors with low-value investments, suggest that many people are ‘crypto-curious and keen to learn the ropes through trial.

Is Crypto Cryptic?

According to Nowosenetz’s theory, curiosity is based on the perception that crypto can provide investors a quick return – without having to have a deep understanding or deep knowledge of the topic.

“The main attraction and benefit of crypto is the perception that you can make substantial gains on your short-term investment, with 43% stating that this is their main reason for investing in crypto.”

There are other reasons to be interested in crypto.

  • It allows you to diversify your investments/portfolio (20%)
  • It’s simple and easy – anyone can do it. All you need is a smartphone and some money (16%)
  • It is a great currency to invest in (8%)
  • It can be sent to other countries (4%)
  • It is not regulated (4%)
  • You’re cool and trendy and can talk about it with your friends (3%)

Nowosenetz stated that while many are willing to invest, and have an interest in making substantial gains in the near-term, they don’t really understand crypto. 44% of respondents said that their primary concern about digital currency is not understanding how it works.

So, we are seeing a certain investor’ mindset emerge in this space: A consumer willing to take a chance to make quick buck, even though they don’t have the right knowledge or understanding of how it works.

What is restraining people with regards to crypto?

KLA found that 17% of respondents are ‘crypto-curious’ despite having many cryptocurrency possessions.

Just over a third of those surveyed felt they would rather invest in or invest more in crypto if it were not for formal/regulated financial products.

A quarter of respondents felt they didn’t have enough knowledge or understanding to invest in crypto.

There are other reasons why people might not invest or want to invest more.

  • It is too risky. The bubble could burst at anytime, and you might lose too much (11%)
  • Do not trust cryptocurrency (10%)

Lesetja Kganyago is the Governor of South African Reserve Bank. He recently elaborated about his views on cryptocurrency.

It is a crypto asset. The following criteria must be met in order for a currency to qualify. It must be accepted as a medium of exchange. It must also be recognized as a store value. It must also be accepted as a store of value. A cryptocurrency is a store-of-value. Although it is a means of exchanging, it is not widely accepted. He said that it is only accepted by those who participate in it.

“Our approach is to regulate cryptos because people invest in them and lose their money.

He stated that many crypto-assets are based on a technology called Blockchain. It can also be used in other ways. He said that blockchain technology is being explored by the central bank, as well as other central banks.

Author: Isa Misao