Crypto market crash not a worry, Kenyans say

Many Kenyans have remained unflustered by the current crash of the global cryptocurrency market, staying confident that the market will correct in coming weeks.

Speaking to Afcacia, local crypto traders, who have watched the price of Bitcoin – the market leader on whose performance tens of thousands of other digital currencies depend – plummet to a six-month low of Sh3.7 million before bouncing back to Sh4.1 million this month, said they’re not worried by the plunge.

“I have been in the crypto market for over seven years. There is no reason to panic when the market dips,” Vivian Oloo, a Nairobi resident told this writer.

Victor Kyalo, who at first was scared of digital currency trade after being scammed in 2018 but sought education and joined the trade in 2019, said the trade has been a bull market for a while and the current crash will create a much-needed consolidation.

“It is time to buy the dip. It is a good time to purchase most cryptocurrencies.  Here is another chance for those who thought they were late to the party. The prices will adjust,” he said.

But while experienced traders held on to their digital money despite the crumpling of the market, novices rushed to save their investments in what they fear could become a long bear crypto market.

Richard Atika, who bought Bitcoin last October when the price of Bitcoin was Sh6.2 million, said it has been a shocker seeing a sharp red graph line on CoinMarketCap.

“I have sold it. I can’t wait to see any more damage. I can’t lose everything,” he said, despite a prediction by Finder.com’s latest Bitcoin Price Predictions report that Bitcoin will surpass the Sh10.2 million mark in 2022, before ending the year at Sh8.6 million.

According to the latest Pan African crypto marketplace platform Paxful report, there are over 4.5 million Kenyans in the global crypto trade despite a warning by the Central Bank of Kenya against the trade. In 2020 alone, Kenyans traded Bitcoin worth Sh5.1 billion, Paxful data shows.

The Chainalysis Global Crypto Adoption Index of 2021 ranked Kenya the top country in the world in terms of peer to peer exchange trade, well ahead of the other 154 countries surveyed, despite a caution by the Capital Markets Authority against engaging in Initial Coin Offerings (ICOs) that involve creation of digital tokens using distributed ledger technology and subsequent sale to investors.

Nairobi-based crypto expert and author of Understanding the Blockchain Mr Benjamin Arunda told Afcacia that the current crypto slump is majorly driven by geopolitical factors and the evolving nature of global regulatory environments.

Geopolitical sentiments are playing a critical role in this. In mature crypto markets such as the United States, China and Russia, cryptocurrencies have been aligned to high value assets.”

Though Russia’s president Vladimir Putin has backed crypto mining in the country, the country’s central bank has maintained a hard line against the trade of crypto, highlighting a number of flaws in the market.

“This has caused many huge crypto holders to withdraw their profits. Average traders are rushing to dumb to salvage what is left. But billionaire investors are capitalizing on the nosedive to buy in bulk,” he adds.

He rules out a claim by one Craig Wright, an Australian computer scientist, that he is the actual creator of Bitcoin Satoshi Nakamoto as a cause of the current market tumbling.

As market narratives shift from risk-on to risk-off, liquidity is seemingly drying up as central banks across the world start to taper excess stimulus.

With the spread of Covid-19 winds down globally and as many companies now focus on the bigger potential of blockchain-based assets such as Non-Fungible Tokens (NFTs), the interest is gradually drifting from crypto trade to the metaverse.

According to George Mwakisha, Binance’s East Africa business development manager, it is normal for market dynamics to oscillate but cryptocurrencies remain the one of the most volatile markets in the world.

“When big global corporates buy big and withdraw their profits, they shake the market. But when compared to 2018, the current situation does not warrant a bear market,” he said.

He urged Kenyan traders to not only focus on crypto trade but also open their e-wallets and trade in crypto products that bet on decentralized finance such as dollar cost averaging assets or crypto auto savings.

For Mr Arunda, now is a time to stay away from cryptocurrency business as uncertainties over the fate of billions worth of crypto money mount.

“For the first time we are unsure of how the year will look like in crypto. It is bearish but it could recover if favourbale regulations in big markets are made.”

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AFCACIA MEDIA LTD