Why Do Most Africans Fear Investing in Cryptocurrency?
- Waboga David
- Jul 11, 2021
- 4 min read
All Over the world governments are having mixed reactions on cryptocurrencies Africa taking the lead on this, but why are are most Africans shunning it?
Kosh Andre tries to find out why on his blog https://thesaleskid.wordpress.com/2021/06/19/thesaleskid-worspress-com/
He discovers that,
Cryptocurrency is a sophisticated resource designed to work as a method of exchange that uses cryptography to authenticate transactions, regulate the creation of additional units, and validate the exchange of benefits.
Recently, there has been a lot of talk about cryptocurrency and how it can turn ordinary people into extremely wealthy people in a matter of years. To make this happen, however, one must invest his or her assets in a cutting-edge kind of money that will soon become the world’s legal tender in a few years.
Speculators will cash in by selling their Cryptocurrencies – which might have surged in value by over 10,000% compared to the underlying venture – at greater rates around that time.
Despite the allure of the offer, many Africans are skeptical of the story — and here’s why!
Cryptocurrency is viewed as a risk by Africans.
During a conference, a Crypto entrepreneur advised that African governments spend one hundred million dollars apiece in Cryptocurrency since they may gain over seven hundred billion dollars in ten years. A teenage observer questioned him during the Q&A session how many governments in sophisticated countries have made such investments so far; the Crypto entrepreneur had no response! Cryptocurrency is a bet that might pay off….or fail, as Africans are well aware. Because Africans enjoy gambling, perhaps crypto entrepreneurs should embrace this reality and refrain from making too many promises. You never know, accept it’s a gamble, and Africans might get involved!
African governments have issued several warnings to their citizens against cryptocurrency investments.
Many African governments, through their Security and Exchange Commissions (SEC), have issued warnings against investing in cryptocurrencies. The Nigerian Securities and Exchange Commission for instance issued a public statement to this effect, cautioning Nigerians against investing in any type of cryptocurrency. Africans take such warnings seriously since they are fully aware that the SEC is responsible for safeguarding the public’s interests. If Cryptocurrency is everything they say it is and will be, one can’t help but wonder why Crypto entrepreneurs and experts can’t get African governments and exchange commissions to join them in reaching out to the people.
Crypto entrepreneurs and businesses have a poor brand image.
You should be prepared to do more than print a branded tee-shirt and face cap if you want Africans to give you their money, buy what you’re offering, or invest in your Cryptocurrency! Crypto entrepreneurs brag about making millions and billions, but there isn’t much evidence of their success. Those who can afford modest offices and claim to have millions of dollars in investments are unable to invest in great branding, recruit professionals, or pay high compensation to their sales representatives. Africans are discouraged from investing in cryptocurrency as a result of this.
Members-Only and Online Communities
Many Crypto firms and entrepreneurs claim that their Cryptocurrencies are an online member-only community that does not engage with “outsiders” while trying to persuade others to invest in them. This will not work with Africans because many Africans distrust a process that they cannot see, find, or participate in physically. The only reason Africans trust and use mobile banking is because banks have physical branches and representatives in their area that they can contact in an emergency. Africans will be frightened away from an online operation that lacks such guarantees.
Africa is the market
When communicating to Africans about Cryptocurrency, it is recommended for Crypto specialists and entrepreneurs to avoid using the phrase “there is market in Africa.” When an ordinary African hears something like this, the word “exploitation” comes to mind. The average African will avoid you if you imply Africa is a market to be exploited. Africans also doubt that Cryptocurrency will gain traction on the continent, given its degree of technological sophistication.
Success Stories That Aren’t True
When Crypto entrepreneurs speak to Africans about why they should invest in cryptocurrency, they make every effort to include examples of people who have profited from their investments. While this is frequently a wonderful idea, it frequently backfires because the names presented are of people from Utopia whose achievement can’t be linked to cryptocurrency. Africans are unlikely to engage in bitcoin until they see someone in their close vicinity who has made a profit from it.
The Price and Value Determinants of Cryptocurrency
We can’t deny that the value of any type of currency or legal tender is determined by factors of supply, demand, and acceptability; cryptocurrency is no exception. According to crypto specialists, the more locations a certain ‘coin’ is accepted, the more it may be exchanged, which influences its value increase. One of the reasons why Africans are hesitant to engage in cryptocurrency is the existing level of acceptance.
Too Many Cryptocurrency Types
Yes, they say that variety is the spice of life, but not when it comes to financial concerns! Since it became public knowledge in 2019, there are well over 700 cryptocurrencies in use around the world, each claiming to be the authentic choice while others are untrustworthy. Things like this tend to frighten Africans.
Being referred to as “the future currency”
Many Africans are more concerned with the here and now, especially when it comes to their money! It will be tough to persuade a typical African to part with their money in the prospect of making considerably more in ten years or more. It’s no surprise that an African proverb states that “a bird in hand is worth a million in the wild.” To be honest, there is some logic to that.
Crypto experts depend on failed narrative
You must be able to make a lot of sense through your tales and arguments if you want to persuade people to invest. Unfortunately, when crypto professionals try to persuade potential investors, this is not always the case. They frequently discuss how fiat currency replaced trade-by-barter (as it was originally done in Africa) and weakened the gold standard. This argument will fail to persuade the average African since currency is a type of barter in which commodities and services are exchanged. Furthermore, the gold standard was never weakened! Gold continues to play an important part in the global economy, and its value, demand, and/or acceptance have remained stable over time.
This is not to imply that Cryptocurrency will not flourish in Africa; nevertheless, if crypto professionals, entrepreneurs, and businesses want to prosper in Africa, they must consider the aforementioned factors.
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Waboga David
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