While it has been a volatile year for many industries, the crypto economy is ending the year on a high note. The positive movement in the adoption of cryptocurrencies, regulatory discussions, and developments, as well as several large names in retail and institutional finance dipping into crypto ownership and promotion, are collectively improving a global outlook on Bitcoin and other digital assets.
Crypto adoption of emerging markets:
Having grown to nearly 5 million users since launching 5 years ago, global transactions on the Paxful platform have increased by almost 26% from October 2019 to October 2020.
"Nigeria, Ghana, Kenya, and South Africa are our main markets in Africa. There’s no question that emerging markets are the future of the crypto economy. That’s been clear to us for some time, as we see on a daily basis how tech-savvy Africans are using Bitcoin to invest, trade, send money abroad and accumulate wealth. Bitcoin helps improve lives and gives opportunities for personal and entrepreneurial development. Paxful is all about bringing financial inclusion to the emerging world and we’re ecstatic to help so many people with limited access to the traditional financial services," says Paxful CEO and co-founder Ray Youssef.
South African user registrations on the platform increased by 259% this year, demonstrating that a marketplace like Paxful speaks to a broader audience and offers real-life use cases for digital assets. With indications that the South African government intends to provide greater guidance for crypto-industry operators in 2021, the company expects increased appetite for crypto in the next few years.
Youssef continues, "As a company, we haven’t just relied on external factors for growth. Internally, we’ve worked hard to keep our platform safe, listen to our users, and innovate to meet their needs. One example is that gold and in-game items are now available for trading with Bitcoin and Tether as a result of user feedback. Our success wouldn’t be possible without our users and their input."
The rise of stablecoins:
While Bitcoin remains the king of the crypto-economy, this year also saw explosive growth of stablecoins. It has been reported that the total value of stablecoins exceeded $20 billion recently; a nearly 300% year-to-year increase. There have been various reasons cited for this development, but many experts believe that consumers are flocking to stablecoins seeking a less volatile crypto experience; stablecoins are digital assets whose value is tied to traditional fiat currencies like the US Dollar, designed to minimize price volatility.
Meeting the demand for stablecoins, Paxful introduced Tether (USDT) to assist customers in hedging against a volatile market, protecting their assets, and expanding their portfolios. USDT has been very well received by users, especially in developing countries that struggle with high inflation. Among African based Paxful users alone, a 431% increase in trade volume has been recorded since the introduction of Tether.
Bitcoin as humanitarian aid:
This year witnessed an increased use of Bitcoin by the NGOs and not-for-profit groups to support humanitarian causes. In Nigeria, for example, during the protests against police brutality, crypto donations became a preferred mode of providing financial support to the communities involved. In October 2020, one Nigerian advocacy organization said to have collected around 40% of the $387,000 donations it raised to assist the protestors. Similar developments have been observed in Venezuela, Chile, and even Zimbabwe. Not to mention crypto donations are traceable and are way cheaper versus using traditional money transfers.
Many of the leading crypto industry operators have philanthropy strategies and departments, which are harnessing the power of the crypto-economy to the benefit of social causes. Paxful also believes in the philanthropic power of Bitcoin. In response to the COVID-19 crisis, the company launched the Africa Fund aimed to support African charities in times of need. Thousands of dollars in Bitcoin donations helped provide meals, personal protection equipment, and other essentials in Kenya, South Africa, and Nigeria.
Moreover, Paxful launched its #BuiltWithBitcoin charitable initiative in 2017, with the goal to build 100 schools, water wells, and community gardens for sustainable agriculture funded entirely by Bitcoin across emerging markets. The initiative showcases the capability of crypto in the charity and philanthropy sectors. The latest and fourth school campus sponsored by the #BuiltWithBitcoin initiative is being built in Nigeria and is due to open in 2021.
A node of entrepreneurial growth:
In a very unstable global economic climate, where several corporations have suffered great losses, many crypto companies have been able to maintain a strong growth trajectory. Paxful is committed to sharing its growth with talented business partners from across the globe. This includes exciting collaborative ventures in Africa with crypto-industry partners such as Bitsika, Uhuru Wallet, and the Satoshi Centre among others.
Paxful is a responsible employer who is proud to have been named by Forbes as one of the top global start-up employers offering attractive benefits for staff including sports and food allowances, paid parental leave, new-born bonuses, and medical insurance to name a few.
Youssef concludes: “The crypto economy is becoming an irreplaceable part of the global economic development – even in difficult times - it offers a financial safe-haven and entrepreneurship opportunities. What’s especially heartening, is that the industry is incredibly receptive to allowing younger people to thrive and quickly climb the ladder to financial independence.