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Why Bitcoin Demand is Soaring in Zimbabwe



bitcoin demand in Zimbabwe

The price of bitcoin is currently retailing at over $7,700 across international exchange platforms. However, this is not the case in Zimbabwe.

The price of bitcoin in the African country has skyrocketed to about $14,000 as reported by Golix, the Zimbabwe-based bitcoin exchange. The increased demand for the cryptocurrency in the southern Africa country has highlighted the volatile nature of bitcoin as well as the current economic crisis Zimbabwe is facing.

In an interview with CNN, Yeukai Kusangaya, Golix’s trade coordinator said, “The price has been high for some time and it keeps going up.” She believes that the increased demand will continue to drive the price to higher levels.

Bitcoin has for a while now been used in Zimbabwe by car dealers and other import/export businesses who need to conduct high-value transactions in a country where there is a severe cash shortage.

Worthless Zimbabwean Bond Notes

As it stands, Zimbabwe is undergoing a fresh currency distress. However, this is not the first time that the nation is finding itself in such murky waters.

After the 2008 hyperinflation, President Robert Mugabe’s government was forced to adopt the US dollar as its own currency. Now, years later, the southern Africa nation finds itself in the same place it was in nine years ago. This has led to rationed withdrawals from the banks which are now facing a severe shortage of the US dollars.

In a bid to salvage the situation, the government began issuing “bond notes” that were said to have the same value as the US dollar in late 2016. However, the value of the quasi-currency dropped drastically on black market exchanges which led to increased prices in stores and that they are not accepted by foreign suppliers.

The Zimbabwe Independent newspaper reported a few weeks ago that the, “debilitating liquidity crunch and an acute cash shortage has severely crippled companies which need to import critical inputs for operations.”

International trade has also been affected leaving importers to turn to digital currencies as a way out for them.

Since the increased demand for bitcoin in Zimbabwe, several newspapers have gone ahead to write about it with The National newspaper from the Middle East summing it up the other day as, “This time (in Zimbabwe) the issue is not too much money — it is that there is too little. Because the reserve bank cannot print U.S. dollars itself — the U.S. alone can do that — it must rely on imported cash.”

Bitcoin as a Haven

Bitcoin, which is considered as a speculative investment and a volatile digital currency by investors, has now become a haven for most Zimbabweans offering a degree of financial security against hyperinflation.

“Bitcoin isn’t subject to the central bank measures so it has become an alternative that importers are willing to pay a premium for,” said Nigel Gambanga, a Zimbabwean technology analyst, citing increased businesses that are accepting the currency as payment.

Director of research at news site CoinDesk, Nolan Bauerle, said, “When confidence in national currencies wavers because of monetary policy or political uncertainty, bitcoin often behaves as a safe haven because the price is totally based on market discovery.”

“Some people find bitcoin useful because it is immune from the bright ideas of centralised authorities and their unintended consequences,” he went on to add.

Favorable Conditions for the Adoption of Bitcoin

The growing adoption of bitcoin in Zimbabwe has been an interesting phenomenon among African countries due to the country’s financial history. It is, therefore, not surprising that bitcoin has now emerged as a viable alternative form of currency for its citizens leading to an aggressive surge in demand for the cryptocurrency.

Although Zimbabwe’s case is unique, cryptocurrency experts believe its use in the country can be a good test for bitcoin’s feasibility on a national level.

“The underlying takeaway is that cryptocurrencies are here to stay and have a place in the world where monetary policy and fiat currencies cannot be trusted,” said Kay Van-Petersen, Saxo Bank analyst.

“It’s only a matter of time before an emerging or frontier market government decides to adopt a cryptocurrency as a foundation for credibility, transparency, accountability, and attraction of foreign capital.”

Will Bitcoin Survive?

Digital currency experts believe that the market could come under pressure should the price of bitcoin continue to increase. The price surge also comes at a time when President Robert Mugabe and his family have been put under house arrest as the Zimbabwean military has taken over power.

“I wouldn’t expect any tolerance from a country with a fragile financial system trying to maintain capital controls,” said Hileman, hinting that the government of Zimbabwe might ban bitcoin exchanges like China did.

The key question by Hileman is on whether the southern Africa nation has the capability to impose such a ban, which could potentially have negative effects on its economic future.

On the other hand, there is the thought that the government could embrace the use of bitcoin and maximise it.

“If trade in bitcoin intensifies with no resolution to the country’s currency woes, we could witness the central bank and government revise its position by taking on a more active role in cryptocurrency trading. At the very least, (by) recognizing cryptocurrencies through some form of regulation,” Gambanga stated.

According to Gambanga, bitcoin has the potential of becoming the official currency in Zimbabwe. “The state has already taken extreme measures like banning the importation of fruits. So, adding bitcoin to the country’s multi-currency basket might not be so absurd.”


Bitcoin Remittance Startup BitPesa Launches in Ghana



BitPesa Secures Funding

Nairobi-based bitcoin remittance startup BitPesa has launched in Ghana to continue the growth of its footprint in the West African region. The platform will enable Ghanaians to make low-cost global payments using their local currency, the Cedi.

BitPesa’s services will make it easier for Ghanaians to make GHS payments that will settle in more than ten currencies, including NGN, UGX, and ZAR. This move shows the company’s dedication “to facilitating intra-Africa trade by increasing the ease and speed of doing business in Ghana”.

Launched in Nairobi, Kenya in 2013, BitPesa, is a digital payment and foreign exchange platform that utilises the Bitcoin blockchain to boost the speed of business payments while lowering the transfer cost to and from frontier markets. With its best-in-class products and customer service, BitPesa seeks to significantly reduce the cost of payments from Ghana to other markets such as Nigeria, where it already has operations. Ghana was BitPesa’s “natural choice for expansion” since it is the second largest economy in the West African region after Nigeria.

BitPesa’s CEO, Elizabeth Rossiello, said in a company press release:

“We are constantly looking for ways to promote intra-African trade, so we’re very excited about our services in Ghana.”

“Ghanaians should be allowed to make global payments using their own currency and we are excited to facilitate this. We will continue to improve service offerings, compliance, and value for our new Ghanaian customers,” she added.

BitPesa’s platform makes it possible for businesses to make payments in multiple currencies and has operations in Kenya, Nigeria, Uganda, Senegal, DRC, the UK and Europe. Following the launch, Ghanaian customers will be able to buy and sell bitcoin on the online platform with businesses being able to make payments intra-Africa to Ghanaian mobile accounts. Currently, BitPesa is connected to two mobile networks in Ghana with more services expected to come with time.

The move comes weeks after BitPesa made its acquisition of TransferZero, a leading Madrid-based digital payments company, expanding its footprint in the Caribbean and Latin America markets.

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Father Defends Son Against Fraud Allegations by Claiming Bitcoin Hack



Fraud Allegations by Claiming Bitcoin Hack

A South African court is handling a fraud case where a farm owner’s son is being accused of misappropriating investor funds and thereafter fleeing abroad. Speaking before the Pretorian High Court the desperate father insisted his son should not be held responsible for the loss of R1.3 billion of his investor’s money and instead blamed hackers.

Alleged Theft of Bitcoin Funds

The son, A’ri’El Willem Theron, reportedly began his alleged pyramid-like investment scheme in 2015, going by the name Love and Let’s Live (LLL).  Following a warning from the Financial Services Board stating he was not a licensed financial services provider and subsequent freezing of his accounts, investors funds were moved to Panama. However, when investors demanded refunds Theron Jr. told them the money had been used to buy bitcoin, which had then been stolen from storage by a hacker.

He even went ahead to tell them he had left the country seeking to start fresh and that he was sorry about the situation. The trading scheme was wound up last month with the company’s liquidators applying for the liquidation of Ruby Success, a farm owned by his father. Liquidators have argued R41 of the money out of which Theron Jr. managed to defraud investors was used to purchase the farm for his father, Andre Theron.

Only last week, Andre Theron unsuccessfully tried to convince the court not to liquidate his company Ruby Success Inc., which owns the R57 million farm in Mpumalanga. The court gave him a respite until April 5, 2018, where he should provide reasons why the company should not be liquidated.

Prelevance of Bitcoin Scams in South Africa

Interestingly, reports surfaced a few weeks ago of several South Africans having been conned after investing in a suspected bitcoin Ponzi scheme. Many investors had invested anywhere between R16,000 and R1.4 million worth of bitcoin with BTC Global and had received inconsistent payouts until mid-February when they stopped entirely. While the firm has denied any wrongdoing the architect behind the scheme has since gone underground and is being pursued by authorities.

For the case of Theron Jr., his father asserts that his son took precautions and stored more than double of his investors’ funds offshore to cover investments. He also said his son used the funds to buy bitcoin since after the closure of his accounts it was the only viable way to pay investors. He denied any of the proceeds of the scheme had been used to purchase the farm or he and his son were fraudsters, alleging Theron Jr. had lost R700 million of his own money in the scheme. Meanwhile, prosecutors are following up on leads gained from the father’s testimony when he let it slip his son may be hiding in Ireland and hope to apprehend him soon.

It has become common practice among bitcoin-related Ponzi schemes to claim that they were hacked when they disappear with investors’ funds, which puts Andre Theron’s statement that his son’s funds digital currency holdings were hacked and stolen into question.

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Cryptocurrency Market Analysis March 16, 2018 – HODL: Friend or Foe?



Cryptocurrency Market Analysis

The ‘HODL’ strategy that everyone has been talking about during the beginning of the cryptocurrency market fall, is now fading away. Regulations, rumours, and ad banning by Google and Facebook managed to crumble investors’ trust in this market. Having said that, the blockchain has gained a lot of popularity all around the world. We still believe that even after a big tumble, as this one, cryptocurrency values will come back skyrocketing again, aiming for at least one trillion in total market value by the end of this year.

Price Analysis

Bitcoin (BTC)

In our previous analysis, we were expecting for the price to move sideways and even drop again to retest the local support from $9,000. The price did move in a sideways direction and this week broke below to retest a strong support at $7,500.

Currently, the candlestick patterns emerged above the mentioned support are indicating a low bullish signal, which can get stronger if this week will close back above $9,000. Otherwise, we could see a continuation of the down move, slowly heading for the key level support from $6,000.


Ethereum (ETH)

Ether proved itself stronger at the beginning of the week, but it was also pulled into the whirlpool in which the entire market entered at the end of last year. As we expected, bulls could not breach above the latest highs, at the end of February, and currently is trading in a key support area, right above the $600 level.

For the moment bulls seem to have balanced the power and the drop could see a short break around these levels. A strong move upwards is highly unlikely in the following week, and prices could see some stability below $800.


Ripple (XRP)

The Ripple company has been very active in the media lately promoting new partnerships for their services, but the XRP continued the down move alongside the other cryptocurrencies.

Currently, the price action shows a slowdown of the drop at the key support area around $0.70. This drop just builds up a stronger accumulation area. Even though the bears’ pressure has yet to dissipate, the wheel might soon turn in the favour of the bulls.



Buroka Tech

This cryptocurrency market analysis is being presented by Buroka Tech. Buroka Tech is cryptocurrency-focused technology provider for financial institutions. 

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