Crypto currency - Afrikan Heroes

Investors Alarmed for Crypto Market as Bitcoin Soars to the Top

October 22, 2021

Investors globally are apprehensive over the recent rise of the prices of Bitcoin and other cryptocurrencies which saw remarkable surges over the weekend driving the entire crypto market to its all-time high of around $2.5-trillion.

Bitcoin itself is seeing a nearly record breaking surge, climbing to over $60,000 per coin for the first time since May. The all-time record price of Bitcoin is $64,863 – a milestone the digital currency glimpsed in April this year.

This recent surge propelled by renewed interest in crypto stems from a highly-anticipated bitcoin futures exchange-traded fund (ETF), as well as several new bitcoin and crypto offerings being made available by some of Wall Street’s biggest names.

The large cryptocurrencies, including bitcoin and ethereum, are seeing rocketing growths with crypto investors predicting that this “ludicrously strong” rally will continue through the rest of 2021.

As cryptophiles are rejoicing, Forbes reports that an influential central banker currently serving as Bank of England’s deputy governor for financial stability is warning that “a massive collapse in crypto-asset prices [is a] plausible scenario.”

The banker, Jon Cunliffe, is also warning that the pace at which bitcoin and the crypto market is growing could pose a threat to the financial system if not regulated “urgently.”

Cunliffe pointed to the unchained growth of the market, soaring by “roughly 200%, from just under $800-billion to $2.3-trillion” in a matter of hours.

He uses the example of the 2008 global financial crisis to point out that it doesn’t take a wide-ranging change to fuel a market collapse – “As the [2008 global] financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems—sub-prime was valued at around $1.2 trillion in 2008.”

The price of bitcoin and indeed other crypto remain extremely volitile because of the unbacked nature of cryptocurrencies, whose price is dependant simply on how much people are willing to pay at any given time. This causes massive highs and devastating lows. In May, bitcoin reached $60,000 per coin but then the market leapt into a freefall with bitcoin losing almost half of its value in a matter of days.

Cunliffe, who has been monitoring cryptocurrencies over the last several years as an advisor to the G20’s financial stability board and the Geneva-based Bank of International Settlements, has called on regulators to urgently deploy “tough regulations” in order to avoid a market collapse.

“When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice,” Cunliffe said.

“Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency.”

While some crypto exchanges like Coinbase and Binance have clashed with regulators in the past, others are welcoming more regulations and regulatory clarity in a move they believe will open the sector to more innovation and new funding opportunities.

Cunliffe’s warnings that the massive crypto wave could lead to a future meltdown aren’t in a vaccuum. Earlier this year, Viktor Shvets, MD at Macquarie said on a Bloomberg podcast that the next financial crisis could “originate in the mania for cryptocurrencies”.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

#EndSARS: How Nigerian Government attempts to sabotage crowdfunding efforts

October 15, 2020

The Nigerian government has been accused of trying to subvert the ongoing protests against Police brutality tagged #EndSars by influencing banks to shut out inflows in support of the protests. This came after fintech companies became pivotal in fundraising for the #EndSARS protests. The protesters with the help of fintech firms set up two payment links, one set up by Flutterwave and another by a social advocacy platform called Feminist Coalition have been the two most prominent crowdfunding links since the protests started on October 7.

However the group first reported that its payment link was under maintenance when they noticed a downtime, then they later announced that Flutterwave, the company at the centre of the fundraising was invited by the Central Bank of Nigeria over the handling of the funds. Many were of the opinion that government officials were embarrassed at the rate the protests were being sustained leading to investigations into how the funds were being raised. When the Flutterwave link got threatened by the shutting down of the bank account said to be domiciled at a new bank, the protesters resorted to cryptocurrency which led to the raising of over ₦25 million ($65,000) the Feminist Coalition donation link. The funds are going towards everything from refreshments to legal fees, medical bills and towards the welfare of family members of victims of the protests.

To avert efforts by government to checkmate funds donations, the Feminist Coalition has made alternative bank and cryptocurrency accounts available for those who want to explore that route, ideal because of the digitised nature of the currency and the inability of the government to shut it down but questionable in the speed with which it can be converted to liquid local currency cash to meet protesters needs on ground.

Bundle Africa, another cryptocurrency platform has been raising BTC funds for the protests since Saturday, October 10. Although they initially intended to put these into the now shut down Flutterwave donation boxes, their channel will become quite central in the interim. Cryptocurrencies have always been the next best option since the tweet alerting the Twitterverse of the deactivation of these two major crowdfunding links.

But its predominant use case on the continent so far has been trading and investments rather than everyday exchange of value in spite of their popularity. Just two months ago, Nigeria was at the top of the Sub Saharan Africa peer to peer bitcoin trading volumes totaling an equivalent of $9.8 million. Sub Saharan Africa’s trading volumes came in second highest with $18.3 million worth of bitcoin traded during this period. However, if the situation persists, it presents an opportunity for more fintech companies particularly those playing in the cryptocurrency exchange fields to be what Flutterwave has been in the last six days to the protest.

If Feminist Coalition plugs its BTC address in Sendcash’s system for instance, any cryptocurrencies donated can be immediately sold for naira and then deposited in a temporary naira bank account via Paystack where the funds can continue to be disbursed seamlessly as is needed pending the outcome of the Flutterwave impasse with the Central Bank.