Marius Reitz - Afrikan Heroes

The Cryptocurrency Year in Review – Record Highs and Growing Maturity

January 5, 2022

By Marius Reitz

The cryptocurrency world in 2021 was buoyed by a number of high-profile institutions and businesses investing in crypto at far greater scale than previously seen, driving crypto’s evolution into what is now a multi-trillion-dollar asset. Bitcoin and ether, the two largest cryptocurrencies by market cap, recorded new all-time highs and El Salvador became the first country to adopt crypto as legal tender.

All-time highs

The bitcoin price burst through its all-time high of US$68 000 on 5 November, showing a massive increase on the $28 000 range in which it was trading in December last year. But the crypto market also took some brutal hits. Cryptocurrencies are still a new alternative asset class and volatility is expected to characterise crypto for a while yet.

Marius Reitz is the General Manager for Africa at Luno — ***Marius Reitz, General Manager for Africa at Luno***

Businesses and institutions get on board

In the US, where regulation allows for entry into crypto, sophisticated firms like Fidelity, Goldman Sachs and JPMorgan are entering the crypto market and the Proshare Bitcoin ETF (world’s first bitcoin ETF) saw record inflows into the fund.

Microstrategy, the Nasdaq-listed business intelligence company, continued to buy additional bitcoin during the year and now has holdings worth about $6-billion. The move was widely viewed as a green light from corporate US for crypto.

Fintech and traditional payment providers began to adopt blockchain and crypto solutions, with giants PayPal, Venmo, Mastercard and even Twitter allowing customers to transact in bitcoin. In South Africa, Capitec and Discovery Bank formed partnerships to list crypto as a new product offering.

Maturity

Digital assets and crypto businesses showed massive growth and significant market cap gains, indicating maturity in the sector. Coinbase debuted in 2021 as the biggest digital asset listing in history, coming to market at twice the valuation of Nasdaq. This has been positive for the industry, increasing trust and transparency. Having a public company of this size shows those crypto-related businesses — and the crypto asset class — should be taken seriously. The crypto sector is now valued at more than $3-trillion.

Crypto’s value for emerging economies

El Salvador became the first country in the world where bitcoin is considered legal tender, which means that retailers are legally obliged to accept it as payment. The move was met with fierce support and fierce criticism, but it does confirm the value of cryptocurrencies as a way for developing economies to bypass a global financial system which relies on unfavourable loans and is geared towards the world’s richer countries and individuals.

Crypto as an asset vs payments use case

On Luno, the number of monthly active customers buying or selling crypto doubled from last year. We’re seeing customers hold their crypto for on average 10 months, compared to an average of just three months in 2017. This is perhaps an indication that we are in the early stages of moving away from pure speculation to some customers seeing longer-term value.

While we’re still in the asset phase, we are seeing slow but continuous growth.

Regulation

Globally, we have seen movements to regulate crypto. Draft regulations were announced in 2021, and South Africa’s regulators have taken a pragmatic approach to regulating crypto. Luno is in favour of regulation of the sector and believes that the adoption of regulations will result in positive spinoffs for the industry.

Globally, a number of central banks have issued digital currencies. Nigeria launched the e-Naira in 2021 and South Africa is investigating a digital currency, which shows central banks bringing crypto closer.

Marius Reitz is the General Manager for Africa at Luno

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

South Africans Are “Extremely Bullish” About Crypto

September 30, 2021

South Africans seem to be quite savvy and bullish about crypto. This is the position of cryptocurrency buying and selling platform Luno which recently conducted a survey of over 1000 of its customers in South Africa in August 2021, along with customers in the UK, Malaysia and Indonesia.

Luno found that 82% of South Africans who hold cryptocurrency on its platform expect the bitcoin price to rise significantly, some believe as high as $100,000. Currently, bitcoin is trading at around $43,600 today after reaching $50,000 at the end of August.

Marius Reitz, Luno’s GM for Africa, says the overall sentiment is extremely positive, with 61% of SA customers indicating their intention to hold their investment (hodl in crypto-speak) or buy any price dips over the next six months. South Africans are most optimistic about Bitcoin and Ethereum.

Luno has also seen an increase in active customers in South Africa, with the number of users who have bought or sold crypto on the platform up 140% over the past 12 months.

Total bitcoin trading volume across several exchanges in South Africa was around $25-million traded in the past 24 hours as of Thursday, 30 September, around 56% of which was on Luno. Crypto Investors Look Towards the Long Term.

Reitz cautions, however, against the perception of crypto investors as extreme risk-takers seeking only short-term gains.

“Just 14% of South African customers say they plan to day-trade for short-term profit for the rest of the year. On average, existing Sotcouddhduth African customers are holding their crypto for eight months before cashing out. In addition, we are seeing more South African customers planning how to invest their money. Over the last three months, more than one in 10 (12%) of Luno’s active South African customers have made use of the repeat buy function, which allows you to automatically purchase a set value of crypto at daily, weekly or monthly intervals. On average they are buying around R400 worth of crypto a month,” he says.

Luno’s South African data correlates with online global research by YouGov among 6,642 respondents across six countries. It reveals that, contrary to popular misconception, not all people view crypto as a short term get rich quick opportunity and increasingly more investors hold it as part of a diversified portfolio.

The national picture shows that the importance of having money is focused on long term goals, most commonly to fund their family’s wellbeing (64% of SA respondents), for greater flexibility in life generally (55% of SA respondents) and save for their retirement (39% of SA respondents). In addition, South African adults have been indicating that banks (49%) and specialist financial media (36%) were trusted sources for investment decisions.

“New insights indicate that the stereotypes around cryptocurrency investors may not hold true. Instead, we are seeing that South Africans who own crypto are saving more regularly, have longer-term goals and are more financially savvy. Although we operate in over 40 countries, Luno views Africa as one of, if not the most promising region for the adoption of cryptocurrencies due to its particular combination of economics and demographics,” concludes Reitz.

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

The Seven Cryptocurrency Predictions for 2021

January 29, 2021

South Africa’s cryptocurrency exchange, Luno has highlighted that the ongoing volatility, further progress on regulations and continued interest from institutional investors can be expected in 2021. “Looking back at our predictions from last year – the Bitcoin halving happened without a hitch and the industry matured as institutional investors entered the market,” says Marius Reitz, GM for Luno Africa.

“2020 was a proper stress test with Bitcoin hitting a low of around $5,000 in March and a high of $28,000. The new year is following the same trend with the price already reaching the $40,000 level.” The year 2021 presents seven major challenges that participants and observers should be on the watch out for.

Institutional investors will continue to flock.

2020 was the year of institutional investment, with MicroStrategy, Mode, Square and more moving high percentages of their cash reserves in Bitcoin in a bid to hedge against the inflationary potential of fiat currency. Corporations, institutional investors, family offices, and hedge funds all want Bitcoin to diversify their portfolios.

While the numbers are small relative to traditional markets, institutional investment will continue to grow as the economic implications of Covid-19 become clearer.

Adoption will be on the rise

While we are seeing large price movements, we expect that mainstream adoption will grow in 2021. Major players are increasing their investment and interest in cryptocurrencies. In addition, the retail market is set to pick up on the back of booming crypto assets, greater media attention and easy access for anyone. With each bull run, more investors enter the market for speculative purposes, thus growing the user base and moving closer to a critical mass of users for the crypto payments and other use cases to develop.

A recent survey conducted by Luno revealed that while a single global currency is not yet seen as valuable by respondents in Europe and Asia, Africans are ready to embrace a global currency. More than half of the respondents in Africa believe that a global currency would improve the current financial system.

Libra/Diem to launch

The cryptocurrency project launched loudly in 2019 by Facebook, Libra was relatively quiet in 2020 and made significant changes to its intended offering, including a rebranding to Diem.

This project is driven by some of the biggest companies in the world including Uber, Spotify, PayU and Andreessen Horowitz. As it unfolds, Diem could spark another wave of large companies wanting to get into the game of issuing their own coins.

New US administration

Joe Biden’s administration includes Treasury Secretary, Janet Yellen, who is “not a fan of Bitcoin”. Given the amount of institutional money that flooded into crypto and legislation allowing banks to hold Bitcoin on behalf of their clients in 2020, there’s likely to be significant pushback from Wall Street that may make any bearish positions hard to maintain.

There are also several US state senators who are bullish on crypto, so it will be interesting to see if other countries follow the US’s lead should the country become more crypto-friendly.

Maturing regulation

With the crypto space maturing rapidly, regulators globally are accelerating efforts to either embrace or regulate cryptocurrencies. In South Africa, proposed regulations have been tabled by the South African Reserve Bank and the FSCA recently announced a draft declaration of crypto assets as a financial product, which effectively means that any entity or person who renders intermediary services in relation to crypto-assets must be an authorised financial services provider.

Internationally, we expect to see more guidelines come into effect this year. Numerous central banks held talks on central bank digital currencies during 2020, with many now either in the research phase or further along.

Rival blockchain

The first phase of Ethereum 2.0 finally launched on 1 December after years in the making. This is a huge transition for Ethereum, unprecedented in the history of cryptocurrency, which could leave Ethereum in a state of flux for the next two years, possibly opening opportunities for rival blockchains with similar offerings. Following its rapid transformation, Ethereum could get closer to its goal of becoming a globally-usable ecosystem for companies in all sectors and industries.

Cryptocurrency prices

In a year of economic uncertainty, Bitcoin didn’t waiver, outperforming the likes of gold and other stocks and shares. We have seen weeks of exponential growth and new all-time highs, but the crypto market has also taken brutal hits – all within the first month of 2021. As a result, price predictions are all over the internet.

As venture capitalist, Tim Draper says, “Nothing is steady when one technology supersedes another. As Bitcoin eclipses the government currencies and the banking system, there are going to be many fits and starts.”

Cryptocurrencies like Bitcoin are still a new alternative asset class and ongoing volatility is expected. A longer-term view shows crypto to be on an upward trajectory even with massive price drops.

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

South African Crypto Exchange Records High Subscription Internationally

August 29, 2020

South African Crypto exchange Luno is witnessing a spike in the number of subscribers leading to a record five million spread over 40 countries thanks to the company’s aggressive expansion strategy which has seen the company make landfall in Australia. The launch comes shortly after the crypto exchange revealed it would also be available in the UK. Speaking on the development, the General Manager for Luno Africa Marius Reitz says that key factors in the decision to enter the Australian market also included the young age of the population as well as disposable income. “Our African expansion is moving steadily forward and we recently launched in Zambia and Uganda. Luno is on an expansion drive and the Australian crypto landscape ticked many of the boxes on our checklist.”

General Manager for Luno Africa Marius Reitz

There has been an upsurge of about five-fold in the number of fintech companies in Australia in the past five years. Almost 60% of the digitally active adults in the country are considered fintech adopters. While there are crypto exchanges operating in Australia, they tend to be quite complex and serve a niche of tech-savvy traders. “We identified an opportunity due to the relative complexity of their cryptocurrency landscape. Luno’s platform is a simple, easy and safe way for average and starter crypto investors to buy crypto – new customers can go through our digital KYC (know your customer) process and complete their first transaction within a few minutes. We have a distinct focus on helping our customers to learn more about the future of money and cryptocurrencies,” says Reitz.

Cryptocurrency according to Reitz is well received in Australia noting that “Australia’s Independent Reserve Cryptocurrency Index (IRCI) estimates that at the current rate of adoption, more than 50% of Australians under 34 will own crypto in the next five years. A third of regular investors spend $100 – $500 per month on crypto.”Meanwhile, the regulatory environment is a further bullish indicator. The Reserve Bank of Australia has run a proof-of-concept for a wholesale central bank digital currency while the Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency and anti-money laundering regulator, has been regulating the crypto industry since April 2018.

“We believe that regulation is an important catalyst for broader cryptocurrency adoption. Luno welcomes regulation as it will provide consumers and professional service providers, such as banks and auditing firms, with the comfort that the company they are dealing with is held to defined regulatory standards,” says Reitz.

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