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4 Things You Should Know About Investing in Cryptocurrencies

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investing in cryptocurrencies

If you go through any blog or information platform related to finance and investments, you would have certainly come across the word ‘cryptocurrency.’ In recent years, cryptoassets like bitcoin have been dominating the headlines as more and more people are developing an interest in this sphere. Prices have skyrocketed and are projected to increase further in the next few years.

Despite the influx of new investors, you might be a bit skeptical as to what investing in cryptocurrency actually entails and how suitable it will be for you to do so. Here are a few points you should go through to understand if investing in cryptocurrencies is a good idea:

1. Blockchain technology is the future

Almost all cryptocurrencies rely on blockchain technology to function. The blockchain enables trustless, peer-to-peer transactions that are (generally) recorded on a public ledger. 

Here’s how it works: the financial details of all the transactions ever made are recorded in the blockchain and can be viewed by anyone who wants to. Due to its success in the cryptocurrency industry, blockchain technology is now being adopted by various financial institutions to keep track of transactions. Blockchain technology is poised to dominate systems in the future and it will be good to become acquainted with the technology early on.

2. Improved regulations

As it has developed, the rise of Bitcoin has brought in several regulations. Governments of various countries, where crypto is used widely, have taken several steps to put regulations in place that would ensure that investors’ money is secured and that they are protected from crypto scammers.

In the initial years of Bitcoin, many people were skeptical of investing because they believed that there was too much of a free reign and it needed some regulations in place to ensure investors’ safety. With actions by financial regulators, most of their doubts have been removed as there is now lesser uncertainty in investing in crypto. 

3. The investing process is quite simple

As cryptocurrencies are now becoming increasingly popular, with more and more people investing in it, startups are simplifying the process of investing even further to attract more people. Much of these simplifications can be owed to cryptocurrency exchanges that have been set up over the past few years.

Cryptocurrency wallets have also eased the process as you can simply purchase the services of one with your credit/debit card and then use it to store all of your cryptocurrency in a secure manner. All you need to do is to find a suitable platform to trade cryptocurrency.

Make sure that you spend time to go through the conditions of different platforms and select the ones you feel the most secure about. When you make a purchase via the platform, the crypto will be transferred to your virtual wallet where it will be kept securely until you sell it off or use it for transactions.

You can find a broad explanation of the investing process at the top10cryptobots website to solidify your knowledge about digital asset market trends.

4. Investors don’t have to go through dozens of metrics

There is a set of metrics established for assigning value to any tradable asset. If you take the example of the most common investing platforms – the stock exchanges – you’ll see that investors look for different variables of stocks like their income statements and balance sheets. Investors usually look at fundamentals before assigning value to any asset and then deciding whether or not to invest in it.

In cryptocurrency, this set of predetermined metrics does not exist (yet). You have to look for various trends in the crypto market and decide for yourself when the time is right to invest. 

What is crypto’s future?

how to short bitcoinThis is perhaps the most important question that you would have as a potential investor in bitcoin. Ever since its inception, the cryptocurrency industry has achieved one milestone after another. Prices have been soaring, and more and more investors are trying to get a piece of the pie.

And it’s not just the major assets, like bitcoin, that have seen a positive trend, even the newer ones are witnessing it.

At a time like this, when financial institutions across the world are struggling, and when there have been so many upheavals in the global economy, looking for alternative investments makes sense. 

Up until now, banks were considered the safest place for keeping your money. But in the past several years, we have seen how major banks have sunk overnight and have failed to repay account holders. Investing in stocks has also become very risky. Cryptocurrencies have shown an overall increase in prices even after so many crises all across the globe. Further, these prices are expected to soar even more within the next five years. In fact, it is being predicted that Bitcoin would surpass its all-time high of $19,783.

Making a decision of investing in something you haven’t done before can seem like a bit of a gamble. But keeping all these points in mind, it would be safe to say that if you get a proper understanding of how crypto world works, you could do well with your digital asset investments.

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New Ethereum Wallet Argent Makes DeFi Accessible for Everyone

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Argent

The DeFi market is booming. The total amount of crypto correctly locked in DeFi protocols recently exceeded $2.4 billion. More and more crypto investors are turning to DeFi DApps to earn interest on their cryptoassets. However, DeFi is still too complicated for the average non-techy investor to get involved. London-headquartered Ethereum wallet provider, Argent, wants to change that. 

BitcoinAfrica.io reached out to Argent co-founder and CEO, Itamar Lesuisse, to learn more about Argent and the DeFi market. 

What is Argent? 

ArgentArgent is a user-friendly Ethereum wallet that enables you to store, send, and receive, borrow, earn interest, and invest. Effectively, it is a one-stop-shop for all things DeFi at your fingertips.  

Unlike most Ethereum wallets, which focus purely on storing, sending, and receiving ETH and ERC-20 tokens, Argent goes a step further and provides easy access to an array of DeFi DApps

“Argent’s mission is to empower everyone to control and prosper from their digital assets and identity. Everyone should have equal access to economic opportunity and crypto can be a critical enabler of this.” Argent CEO, Itamar Lesuisse, told BitcoinAfrica.io 

“To this end, we’ve built the first non-custodial wallet with the ease of use and security of the best new bank apps. You can earn interest and invest in a tap via DeFi DApps; protect yourself with daily transfer limits, whitelisted contacts, and easy locking; and you never need a seed phrase,” he added. 

Argent is available for Android and iOS and has a very smooth onboarding process. No mnemonic phrase to write down and no wallet.dat file to back up. You sign up a username and passcode, and you provide an email address and a phone number. That’s it. 

To fund your wallet, you can either transfer ETH or ERC20 tokens or you can purchase them in-app via Apply Pay, bank card, or a bank transfer. This is made possible through a partnership with MoonPay.

Arguably, the best feature of Argent, however, is that it provides direct access to DeFi protocols in an extremely user-friendly way. 

DeFi Made Easy

Argent enables you to use the digital assets held in the wallet to invest in DeFi protocols with the click on a button. There is no need to sign up for each platform. You simply access the “Invest” section and have immediate access to leading DeFi protocols, such as Aave, Compound, PoolTogether, and Uniswap. 

Even first-time crypto users can get involved in DeFi. All it takes it choosing the asset you want to invest, how much of it, and in which protocol you would like to place it. 

For example, you could purchase $1,000 worth of USDC and place it in Compound to earn 1.75% APY. That would likely be more than the interest any bank would pay you on US dollars. 

Moreover, Argent users can invest in TokenSets, take part in PoolTogether, or provide in a Uniswap liquidity pool. 

What’s Next for Argent?

Argent launched the public version of its app in May 2020 and has already made waves in the Etherem community. But this is only the beginning. 

“In the last few months we’ve launched our DeFi Hub (which provides one-tap access to the best DeFi DApps, like Compound, Aave and TokenSet), and also dark mode,” Lesuisse told BitcoinAfrica.io. 

“Next, we’re focused on making it easy for anyone to access a DApp, even if they don’t have a crypto wallet. Our SDK for DApp developers will mean people can onboard to a DApp without a browser extension or seed phrase. They can easily buy crypto with fiat, and they can use the DApp without having to hold ETH. We hope it significantly lowers the barriers to DApp adoption,” he added.

The Future of DeFi

Currently, the DeFi market is a playground for crypto traders and the Ethereum community. But the market is growing as it is receiving more media attention as well as an influx of funds. 

Lesuisse and his team envision that the DeFi market will become more accessible and user-friendly in the coming years. And that it will open it to non-crypto investors as well. 

“Over the next five years, we hope it becomes even easier to use, safer, and, most importantly, develops more use cases that are compelling to a wider audience. We hope by solving many of the usability issues that DApps can focus on building those use cases, taking DeFi from a niche to a mainstream topic.”   

The DeFi market is still in its infancy. Vulnerabilities and bugs in already operational protocols will likely continue to plague DeFi as part of its growing pains. But that doesn’t change the fact that DeFi has the potential to become the fintech innovation that will finally take power away from banks and into the hands of the people.

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Top 7 Most Popular Methods for Buying Bitcoin in Africa

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Buying Bitcoin in Africa

Buying bitcoin in Africa is possible with several easily accessible payment methods. This guide will look at seven of the most popular methods that Africans are using to purchase bitcoin.

Buying Bitcoin in Africa with Mobile Money

Sub-Saharan Africa is the leading mobile money market in the world. According to a GSMA report, the mobile money transaction value in Sub-Saharan Africa was $456.3 billion in 2019.

Some of the top mobile money providers on the continent are telecom companies like Safaricom, MTN, Econet, Airtel, Orange, Telekom, and Inwi. These companies offer M-Pesa, MTN Mobile Money, EcoCash, Airtel Money, Orange Money, T-Kash, and Inwi Money, respectively.

Since mobile money platforms are easily accessible in most parts of Africa, crypto exchanges and P2P marketplaces have adopted them as payment methods. For example, Paxful supports payments via all of the above mobile money platforms.

The acceptance of mobile money payments on crypto platforms means that buyers can use their local currencies to buy bitcoin.

To buy bitcoin via mobile money, all you need is the seller’s phone number and name. In most cases, the seller should be a subscriber of the mobile money platform you are using to make payment.

Buying Bitcoin in Africa via Bank Transfer

Bank transfers are another popular method of buying bitcoin in Africa. While the number of mobile money subscribers in Africa is increasing rapidly, bank accounts are still relevant. According to data from Statista, 298 million adults in Africa had a bank account in 2017. Therefore, it makes sense that crypto platforms would support bank transfers as well.

Buying bitcoin via a bank transfer on Paxful, for instance, is as easy as transferring money to the bank account details the seller gives you.

Buying Bitcoin in Africa Through Cash in-Person

Paying in cash is also a popular method for buying bitcoin in Africa. You can use this method when you are meeting with a seller or visiting the offices of an exchange platform. Paying in cash is a safer method of purchasing bitcoin as long as you ask to see the BTC first. It is even safer to receive the bitcoin first before handing out the payment.

If you are uncomfortable making bitcoin transactions on a P2P platform or over the phone, you should opt to pay in cash during a face-to-face meeting.

Paxful offers a location filter that you can use to find the most suitable cash in-person deal near you.

Pay With PayPal

buy bitcoin with PayPal instantlyPayPal is a global payment method that is accessible by most people across the globe, including Africans. That is why a few crypto platforms like Paxful allow payments through PayPal.

However, many exchanges do not allow PayPal payments because of chargebacks. If you pay for BTC through PayPal, then report a few days later that you did not receive the bitcoin even though you did, PayPal is likely to favour you, the buyer. This means you will get a refund and keep the bitcoin. Since it is difficult to connect the BTC to the original owner, the seller has no evidence to make his case. Therefore, to avoid fraud, most crypto exchanges do not accept PayPal payments.

Nevertheless, platforms that accept this method of payment require buyers to undertake several actions to protect the seller. For example, Paxful advises sellers to ask buyers to write some words on a piece of paper and take a selfie with it. Sellers can use this photo as evidence in case of a dispute. Sellers could also ask buyers to provide an ID, a billing address, and a social media account link to prove their identities.

Pay Via Chipper Cash

Chipper Cash is a cross-border money transfer option that allows users to cash-in from their mobile money wallets. Once you top-up your Chipper wallet, you can send money for free to anyone in Ghana, Nigeria, Uganda, Rwanda, Tanzania, Uganda, and Kenya. Chipper plans to expand this service to more African countries.

The cross-border nature of Chipper Cash makes it ideal for buying bitcoin in Africa. So, if you are a Kenyan buyer on Paxful, you can purchase bitcoin from a seller in Ghana and pay via Chipper Cash. The platform uses live exchange rates to process cross-border transactions.

Exchange Other Digital Currencies for BTC

It is possible to exchange one digital currency for another on exchanges and P2P marketplaces. For example, you can exchange ETH on Paxful with a trader accepting this digital currency for selling BTC.

Trading one digital currency for another is suitable if you hold several digital currencies in your wallet. Additionally, you can use this method to make a profit and to accumulate your bitcoin holdings.

Exchange Gift Cards for Bitcoin

If you have an unused gift card that you received during Christmas, you can use it to buy bitcoin on a platform like Paxful. Alternatively, you can buy a gift card with cash then use it to buy bitcoin.

When buying bitcoin on Paxful with an Amazon gift card, for instance, you should take a high-resolution picture showing the codes on the physical card. Additionally, you should take a photo of the receipt showing you bought the gift card in cash.

It is easy to purchase bitcoin with a gift card, especially if you have one lying around unused or with a balance. Some of the gift cards that you can trade for bitcoin on Paxful include Amazon, Apple, Sephora, American Express, Asos, and Forever 21.

Some Africans abroad are using gift cards to send money to their relatives back home. To illustrate, a man in London sends his wife back in Nigeria an Amazon gift card worth $200. The wife then sells the gift card for bitcoin, and perhaps make a small profit. She then sells the bitcoin for more profit and cashes out in Naira.

Now that you know the most popular methods of buying bitcoin in Africa, you can learn how to trade bitcoin safely and securely in this guide.

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Naira Devaluation: How Nigerians Can Protect Themselves With Bitcoin

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Naira devaluation
Hillato / CC BY-SA

In July 2020, the Central Bank of Nigeria further devalued the Naira by about 5.5 percent to 380 Naira to the dollar. Previously, the regulator had revised the exchange rate from 307 Naira to the dollar to 360 in March. The reason for the devaluation was the decrease in oil prices, USD shortages, and increasing pressure from external lenders.

In this guide, you will find out what the effects of the Naira devaluation are and how you can protect yourself.

Naira Devaluation

Currency devaluation is a tactic that central banks use to increase fiscal revenues, reduce debt burdens, reduce trade deficits, and boost exports.

With regard to the Naira devaluation, experts believe that this move will boost fiscal revenues and send a positive signal to lenders. However, they are doubtful that devaluation will control the foreign exchange pressures that the country is facing. With a decline in oil prices and remittance flows, foreign currency shortages could persist.

Oil is the biggest foreign exchange generator in the West African nation. Therefore, a plunge in prices and an ongoing pandemic could sink the country into a massive recession.

Nigeria’s Multiple Exchange Rates

Interestingly, Nigeria operates several exchange rates, a situation that has attracted criticism from economists. For instance, the country has a black market exchange rate, where the Naira trades at more than 450 to the dollar.

Furthermore, the country has interbank rates, rates for hard currency buyers, rates for Muslims making a pilgrimage to Mecca, and rates for Nigerians that want dollars for school fees abroad.

That said, the central bank plans to unify the rates, a move that could increase foreign investment and clarity.

The Effects of Naira Devaluation

NGN devaluation

While currency devaluation provides several positive effects, it also results in negative effects. For example, investors that have bought shares and bonds on the Nigerian financial market could have trouble repatriating their capital if the Naira continues losing value.

Moreover, listed companies with foreign investors are likely to face several challenges. For instance, divestments could dip the stock market value of these companies. Also, companies whose operating expenses are expressed in dollars could experience an increase in foreign exchange losses.

Another consequence of devaluing the Naira is inflation. Inflation can affect your savings, resulting in a value decline over time. Although your savings in the bank could earn a higher interest, the interest rate might not be enough to offset the loss from inflation. Inflation will also affect your purchasing power. As a result, your ability to buy items in the future will decline, especially if your income remains fixed.

Additionally, inflation will affect your investments. Your earnings from an investment during inflation will depend on the type of investment you have made. For instance, precious metals typically perform well during inflation. However, it will cost you more to purchase them.

What is the Solution to the Naira Devaluation?

legitimate bitcoin doublerWith your investments and savings at risk, you should consider a non-conventional investment option like bitcoin. Bitcoin is a suitable investment option because it is a store of value for several reasons.

  • First, no one can confiscate the bitcoin you hold. When you own bitcoin, you hold 100 percent ownership rights, and no one can take it away from you. However, other assets like gold do not have the same feature. In fact, governments can ban their citizens from holding gold. Also, the Chinese government has tried to block access to bitcoin several times but has failed to make an impact. That means that bitcoin is difficult to censor.
  • Second, it is easy to move. It seems pointless to own an asset that you cannot transfer as you please. Fortunately, it is easy to send and receive bitcoin, anytime and anywhere. All you need is a computer or smartphone and an internet connection.
  • Third, anyone can buy bitcoin, whatever its price. The reason for this is that you can buy bitcoin in smaller units. Therefore, with as little as $10, you can become a bitcoin owner.
  • Fourth, bitcoin has been growing since its launch, and this trend is likely to continue. The growth is not only price-related but also support-related. More and more people are taking an interest in bitcoin. For example, there were more than 42 million bitcoin wallets by December 2019.
  • Fifth, the bitcoin supply is limited, giving it more value. Any asset that is a store of value should have a limited supply.
  • Lastly, you can hold bitcoin for years and cash out at a huge profit. Many people bought bitcoin when it was extremely cheap. If they decided to sell now, they would make a huge profit. Therefore, it is clear so far that holding bitcoin as a long-term investment is rewarding.

Win 4,000,000 NGN Worth of Bitcoin

Paxful GiveawayCrypto companies are often running campaigns to reward their users. Currently, Paxful has set aside four million Naira in bitcoin to reward traders from Nigeria.

The campaign started yesterday, 21 August 2020, and will end on 31 August 2020 at 11.59 PM.

Winning a reward is simple. If you do not have a Paxful account, create one, verify your ID, and make one trade. 200 new traders that do this will win 5,000 Naira in bitcoin.

Furthermore, Paxful will reward 30,000 Naira in BTC to the top three traders that conduct the highest number of trades, the highest volume of trades, and the most number of trades in Naira. That means that in each category, three traders will get 30,000 Naira in bitcoin. As if that is not enough, Paxful will select one Nigerian trader at random to win 30,000 Naira in bitcoin.

The winners of this giveaway could choose to trade the bitcoin they win for a profit, giving them a chance to earn an extra income. With an economic crisis on the horizon, an extra income is a great opportunity for all Nigerians. Therefore, buying and trading bitcoin is a possible way to protect yourself from the impact of the Naira devaluation.

Sign up to Paxful here to take part in the Bitcoin Giveaway!

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