Cypto assets now bullish on Covid-19
Friday, November 20th, 2020
- Bitcoin’s 12-year history has been marred with wild gyrations and speculations of drug trade and money laundering leading to it being banned in some jurisdictions.
- Adoption of other crypto assets like Ether, Ripple and litecoin is increasing due to their elaborate ecosystems that allow for extension into other applications.
Global cryptocurrency Bitcoin touched an all-time high Wednesday, breaking through the Sh1.96 million mark ($18,000), handing investors handsome returns.
The leading digital currency by market capitalisation reached a high not seen since December 16, 2017 having surged to almost Sh20.1 million ($18,500), according to Coindesk data, a crypto tracking platform.
Analysts said the Coronavirus pandemic caused uncertainty forcing investors to dump dollars for gold and cryptocurrencies.
They also attributed the rally to “institutional investment by the likes of Twitter’s sister company Square and PayPal. The Libra project and Uber coin were also major factors.
Kenya tops Africa
Kenya has the highest number of peer-to-peer bitcoin transactions in Africa, and also among the highest in the world, according to blockchain analytics firms, Chainanalysis.
Kenya’s openness to innovation and high demand has attracted investors to exchange platforms, crypto-brokers, miners and investors.
“Bitcoin has created employment in Kenya, looking at all these Bitcoin Exchanges, it means we have have people working there,” said Arlene Mugambi, a Bitcoin investor and forex trader.
He also said Bitcoin is helping cut the cost of money transfer, compared to other traditional sending options with higher fees.
Bitpesa, Remitano and Bitwala are some of the service providers enabling money transfer through Bitcoin.
Despite increased awareness, Kenya’s Central Bank previously issued circulars to all Kenyan banks, asking them to refrain from doing business with crypto-based companies.
However last month, in a conversation with US based consultant Accenture, the regulator expressed a desire to pilot a central bank digital currency just like China.
Other countries are also working to make their own digital currencies and tame mass adoption of crypto assets, which could infringe on national sovereignty.
Bitcoin is now up 146 per cent on a year-to-date basis and has gained nearly 70 per cent so far this quarter.
Ultra-low interest rates are reducing yields on currencies making investors opt for crypto assets.
Increasing government spending on stimulus programs is increasing money supply making it less beneficial to keep money in local currencies.