South Africans have been getting into the bitcoin craze. SA’s largest cryptocurrency exchange, Luno, reported on Monday that it had added a million users to its ranks in seven weeks.
Bitcoin and other cryptocurrencies such as Dogecoin, popularised by internet memes, have been on the rise during the pandemic. Over the past year, bitcoin — the best-known of the digital currencies — has multiplied its value by five times to R727,452 a coin.
While cryptocurrencies have been linked to crime and the dark web in the past decade, the pandemic has seen a number of institutional investors looking for investments to protect their funds turn to bitcoin as an alternative to commodities such as gold. This week, Luno said it had reached 7-million users, less than two months after reaching the 6-million milestone, an indication that South Africans have also been part of the action in the cryptocurrency market.
Founded in 2013 by two South Africans, Marcus Swanepoel, a former investment banker, and Timothy Stranex, who previously worked for Google as a software engineer, the company is now headquartered in London with more than 400 employees. Covid-19 has led to fundamental shifts in how modern society operates, driven by technology.
In addition to how people work and learn, the pandemic has changed some mindsets around stores of value and wealth, with a number of South Africans proving they will not be left behind. How will local public and private sector players respond? What remains to be seen is whether, like gold, bitcoin will be used as a store of wealth, or a means of exchange, replacing the contemporary notes and coins that make up modern-day trading.
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