Bitcoin to Rand – Bitcoin market Guide South Africa

Bitcoin to Rand - An Introduction

The above cited quote is from Lucas Tesler, Goodbit.

Cryptocurrency and the blockchain are disrupting the economy in South Africa, as more and more people of the population are adopting the digital asset.

Unlike fiat currencies which are bound to regulations and geography, cryptocurrencies are exchanged and used on a decentralized ledger which provides increased transparency and freedom to trade. The explanation of the bitcoin principle illustrates the background of blockchain technology and use cases in Africa.

Although the media coverage of the South African cryptocurrency market does not begin to reflect the accelerated adoption of the coins, the country may soon overtake the largest markets worldwide.

A news platform dedicated to the cryptocurrency market in Africa reveals that South Africa is one of the main Bitcoin countries on the continent. 

This development is underligned by the fact that the majority of Bitcoin ATMs is in South Africa.

With countries such as Ghana, Egypt, Nigeria, Uganda and Zimbabwe showing double-digit inflation levels, the cryptocurrency has become an attractive investment opportunity.

Also, the increased interests of mobile telecom operators to develop the infrastructure in African countries due to the growth of mobile users (which will reach around 725 million by 2020), means that a higher percentage of the continent's population will have tools to access the cryptocurrency environment.

Cryptocurrency Situation in South Africa: Market and Players

Main international exchange platforms and asset management companies are starting to look closer at South Africa because of its high potential of becoming a hub for the best cryptocurrencies.

According to Google Trends, searches from South Africa for Bitcoin ranked highest globally. Despite the instant drop of the cryptocurrency's value, international start-ups are entering the South African market to develop cryptocurrency SaaS platforms and local companies are working on providing South African cryptocurrencies.

There's a continuous crypto boom happening in South Africa. Many South Africans are turning to Bitcoin to protect their funds and assets.

The integration of the first multi-coin crypto ATM in South Africa shows that Bitcoin remains at the forefront of investors' interest.

Online exchange platforms such as Luno or Paxful are experiencing high levels of trade because of the ETH to Rand and BTC  to Rand pairs offered. You find the actual BTC to Rand price on this Luno chart.

However, South Africans who wish to diversify their crypto portfolio can use platforms such as Coindirect (South Africa) which allows them to sell and buy Bitcoin Cash, Ripple or Litecoin along with other ERC-20 ICO tokens.

South Africa will experience an upgrade of its crypto landscape with the launch of Sygnia's cryptocurrency platform later this year. The company revealed that its platform will provide integrated solutions complementary to the standard crypto buy/sell capability.

Read also the latest blog posts of Haroun Kola!

Which Are the Most Used Cryptocurrencies in South Africa?

The most used cryptocurrency in South Africa is the Bitcoin as communities are using the digital coin to offset the collapse of the rand and protect their assets. The BTC to ZAR rate has been showing a stable market trend which is beneficial to the nation's investors.

According to Jacques Serfontein, CEO of Bitmart.co.za, cryptocurrencies have tremendously increased in popularity in South Africa and because of the local currency's weakening, the digital coin is a great investment option – providing monthly returns of between 6% to 15%. BitMart is an online retail platform developed in South Africa, which provides crypto cloud mining solutions and crypto mining hardware.

Although other cryptocurrencies such as Ethereum are present on the South African Market, communities still prefer Bitcoin. Their affinity for bitcoin-related mining rigs proves that South Africa's adoption of the digital coin has far exceeded other African countries.

Why Are Cryptocurrencies Becoming More And More Popular In South Africa?

Due to the sharp downfall of South Africa's local currency and the freedom in crypto trades, the digital currency has increased in popularity throughout the country.

Despite huge selloffs in emerging markets, the Rand took a massive fall and has maintained a low position throughout the last time which resulted in South Africans shifting their focus towards the Bitcoin. Ranking highest in online searches, the Bitcoin exchange platforms are reaching incredible profits in South Africa.

According to MyBroadband 2018 Cryptocurrency Survey which involved a group of around 1,300 MyBroadband readers from South Africa revealed that South Africans who didn't own cryptocurrencies still planned on buying the digital coins by direct purchase or through exposure to the market sector via investments in cryptocurrency miners.

A quarter of the survey's respondents revealed that they will invest in the digital coin, and about 15% also showed interest in crypto mining, while 7% aim to exclusively invest in crypto mining.

How Does Bitcoin Work

To start trading cryptocurrencies, you must have a crypto wallet and an exchange platform to use for your trades. However, if you're interested in more than just trading, buying or selling, you can invest crypto in different trusts such as GBTC, a crypto IRA, an exchange to exclusively buy coins and store them in a wallet or use a hybrid exchange-broker-wallet such as GDAX/Coinbase which allows clients to sell/buy/ store digital coins.

What is a crypto wallet? It's where you store your digital coins such as you would in a bank account but based on encrypted passwords. What is an exchange? It's like a stock/ currency exchange platform where you can trade cryptocurrencies with traditional currencies like the EUR or USD.

Before trading with crypto you should research and study how crypto exchanges work and decide which one to use.

If you're a beginner, you may find it easier to trade crypto stocks on the stock exchange market so that you don't trade crypto directly but through companies such as GBTC which own Bitcoin or another cryptocurrency and sell the shares.

You should also consider the high volatility of the crypto market where price movements can massively increase or fall sharply in an instant determining massive gains or immense losses. Beginners should start by trading major crypto coins such as ETH (Ethereum) or (Bitcoin) against local currencies. You can move onto trading crypto pairs such as BTC/ETH against fiat currencies. Although this form of trade can be rewarding, it's also very risky.

Which Are the Transaction Partners and Which Are The Procedure Steps

Which Is the Legal Framework, Cryptocurrency Regulation in South Africa

Although Bitcoin and other cryptocurrencies aren't recognized by the South African legislation, the South African Revenue Service announced its intentions of developing a taxation framework relating to the crypto market.

The IFWG (Intergovernmental Fintech Working Group), held a workshop in April 2018 which brought together South Africa's regulators and local cryptocurrency businesses.

The IFWG which includes members of the South African National Treasury, the South African Reserve Bank, the Financial Intelligence Centre, and the Financial Sector Conduct Authority aimed to find the best strategies to efficiently regulate the crypto market.

The report released after the workshop included the core matters discussed and the steps which should be taken by local competent bodies.

First, regulators should determine a classification for digital currencies and tokens which can perform several functions and add stability to the 1 bitcoin to rand ratio.

Another issue which was raised was the lack of client authentication that could affect anti-money laundering efforts. Businesses showed interest in educating the population about the crypto market and protecting them against its high volatility.

Regulators also discussed the possibility of integrating cryptocurrencies into the existing legislation rather than creating a new legal framework. The Financial Blockchain Consortium of South Africa reinforced the advantages of implementing blockchain technology which could lead to completely overriding central banking.

Currently, the legal environment in South Africa is very permissive and the crypto market is flourishing throughout the nation.

How Safe Are Cryptocurrencies / Bitcoins?

If they're stored in high-security conditions, cryptocurrencies such as Bitcoin or Ethereum are safe investments.

Otherwise, due to the fully digital nature of these coins, they can be accessed by hackers who can steal them out of your account and use your sensitive financial credentials to their own benefits.

Hackers are responsible for stealing around $1.1 billion worth of cryptocurrencies in 2018 alone, that's why security measures should be at the forefront of any crypto investor/ trader/ owner.

Although the blockchain technology is incredibly secure, the two weak links are the storage keys and the use of the storage keys for transactions performed on exchange platforms. At the beginning of 2018, around 660k wallets were hacked into and emptied from BlackWallet which led to crypto owners incurring immense losses.

Also, if you make the slightest mistake when typing in the 30-digit key when sending cryptocurrencies, you could end up losing funds.
The best way to store your cryptocurrencies is by using a hardware device such as the physical crypto wallet. They are highly secure and have their own password. You can also opt for an online crypto wallet at one of the top storage services if you keep your password away from the prying eyes of hackers.

Outlook About the South African Bitcoin Market

Economic uncertainty currently rules South Africa. The land reform to be implemented by the 2018 inaugurated president Cyril Ramaphosa who promised to change the constitution so that land belonging to white people can be taken without compensation and given to black people who don't own any property has raised the distress of financial research companies such as Moody's and Goldman Sachs.

However, the President reassures that the land reform will not affect the economy of South Africa in any way.

The high rate of unemployment and liquidity crisis also adds to the issues the nation is facing. It's why more and more South Africans consider Bitcoin and the cryptocurrency market a haven.

LocalBitcoins platform shows the same ascending trend in Bitcoin trading. During the first week of March 2018 over 20 mil ZAR (or $1.7 mil) worth of Bitcoin has been traded on LocalBitcoins.

Which Are the Leading South African Bitcoin Companies

The leading South African Bitcoin companies include Coindirect, Luno and iceCUBED (ice3X). Plus Paxful as global leader in the cryptocurrency market.

These cryptocurrency exchange Luno allow deposits from local bank accounts and after funds are cleared, users can buy and trade Bitcoins and Ethereum. As being founded by a South African Luno has become the market leader for bitcoins in South Africa.

This means for Luno wallet owners that there is always a good probability that your counterpart has a Luno wallet as well, which means no transaction fees.

The next company to consider in South Africa is IceCubed. It’s a South African cryptocurrency trading platform. IceCubed is the place to go if you want to buy and sell bitcoins respectively cryptocurrencies for trading purposes.

If you want to earn money with cryptocurrencies by getting a margin on each trade, the simple and transparent fee structure is in your favour.

Coindirect needs to be mentioned as well. It’s a cryptocurrency exchange platform and a crypto wallet provider. The big advantage of Coindirect is that if offers many different cryptocurrencies, not just Bitcoin or Ethereum.

The headquarter of Coindirect is on the Isle of Man, but the company has a strong focus and a well established subsidiary in South Africa.

A real global cryptocurrency leader is Paxful. The US based company is a peer-to-peer (P2P) marketplace. The unique advantage of Paxful are more than 300 possibilities of cashing in, of payment methods for depositing FIAT money in your account.

Especially buying bitcoins with gift card codes is very popular in Africa, because you don’t need a bank account for that transaction. A perfect match for unbanked people to re-enter the financial cycles.

All these platform and marketplaces provide calculators which allow you to determine the price of 1 bitcoin to rand or bitcoin to USD.

To store their bitcoins, South Africans can also use the Mycelium wallet. If you want to check the bitcoin value in rands, you should just access any of the two platforms and view the price charts. How much is 1 Bitcoin in ZAR? You can check any of the South African exchange platforms and find out the price.

Another South African emerging trading platform is Bitfund which offers access to around 20 of the main cryptocurrencies worldwide.

Why Could Cryptocurrencies Like Bitcoin Be A Good Solution for South Africa

Considering the economic, financial and political instability of South Africa, investors and individuals can protect their assets by diversifying their investment portfolio.

Due to its fully digital nature and increased encryption level, Bitcoin represents one of the best solutions for South Africans to mitigate losses and to carry out transactions. About 1,000 retailers already accept Bitcoin payments in South Africa and the numbers continue to grow proportionally with the increase of mobile users in the region.

Bitcoin to Rand - Wrapping It Up

As one of the main economic centres on the continent, South Africa currently leads the path in terms of crypto adoption and blockchain technology development. Because of the unbalanced political and financial climate of the nation, investors and private individuals are looking for the best ways to secure and safeguard their assets.

What could be safer than investing in cryptocurrencies? Check the bitcoin value in rands or the BTC price in USD and start trading.