African users have registered strong crypto activity in 2018 despite Bitcoin’s price instability all throughout the year.
Peer-to-peer (P2P) Bitcoin exchange Paxful has seen a rise in transaction volume by 130 percent since January 2018, posting a weekly average of $21 million as opposed to 2017’s $8.5 million. This increase can be partly attributed to the fact that Paxful’s Ghana user base has tripled with 41,243 accounts and Nigeria posting more than double with 321,476 accounts.
Ray Youssef, the CEO of Paxful, says that Bitcoin traders in Africa account for 41 percent of all new users for 2018. These users transact an average of less than $90 each. This means that at present, African users account for an estimated 35 percent of Paxful accounts, a platform which boasts of 160,000 monthly users.
Youssef also states that major companies like Amazon and eBay do not send in Nigeria due to high fraud rates.
Aside from Paxful, P2P exchange LocalBitcoins has also benefitted in the rising P2P finance awareness in Africa despite the absence of major increases in the market like that of December 2017’s.
Google Trends’ tally of worldwide internet searches for Bitcoin shows Nigeria, Ghana, and South Africa as among the top five countries that demonstrate the most interest in Bitcoin in 2018.
In addition, crypto exchange Binance has launched a subsidiary in Uganda which welcomed 40,000 users on just the first week. In line with this, Youssef states that Paxful seeks to bolster its workforce in 2019 and open offices in East Africa, West Africa, and Southern Africa.
Citing the 97-strong team in their Hong Kong, Estonia, Manila, and New York offices, the Paxful CEO says that they want to triple the company’s size, adding that they are trying to find the “best people” to promote their objective.
Paxful has hired its first “on-the-ground” employees in Venezuela throughout 2018. Because of this, Youssef has expressed concerns that the company may end up on the sanctions list of the United States Treasury Department’s Office of Foreign Assets Control. To be able to circumvent regulatory risks, the company has also created an on-the-ground team in order to learn about African applications on top of Latin American expansions.
Youssef asserts that many users in Ghana are Nigerian expatriates using Bitcoin to send funds back home. In Nigeria, remittance is a huge market, which Paxful have come to realize is a popular use case. The World Bank estimates that $22 billion worth of remittances has been sent to Nigeria in 2017.
OpenNode Nigerian-American head of operations Kevin James says that remittances as well as fighting local inflation has become the two main use cases for Bitcoin in Africa. He adds by saying Ghanaians are “very interested” in Bitcoin, stating that this year will be net positive due to the developments and teams that are entering the crypto space. OpenNode is a Bitcoin payment startup with business links in Ghana.