Why do people buy cryptocurrencies? - A South African perspective
South Africa is home to active online and offline communities, world-renowned thought leaders, popular trading platforms and established industry bodies in the financial space.
As awareness of Bitcoin and other cryptocurrencies continue to grow rapidly in South Africa, we wanted to get a better understanding of the people helping shape this growing ecosystem.
What we did
To help us understand how South Africans see the benefits and risks associated with cryptocurrencies, we worked with a global market research company, Kantar TNS. They conducted an independent survey in 10 countries across Europe, Africa and SouthEast Asia, with a sample of over 1,000 people per market.
Although the Luno industry report is dedicated to consumer investment trends and engagement levels displayed by South Africans, it also draws valid comparisons with other countries surveyed. This was executed to better understand the differences between consumer attitudes in developed and emerging markets.
What we discovered
- Cryptocurrency familiarity is consistently high globally, whereas ownership fluctuates significantly from one country to another; South Africans scored consistently high across both these research parameters
- Bitcoin is still king despite the rapid rise of new alternative coins, namely Dash and Ripple
- Investment value remains the key reason why South Africans buy cryptocurrencies
What are the challenges?
- Trust and security are the biggest challenges (often fuelled by price volatility), lack of critical mass adoption, online scams, and negative press
- The opinion of friends and family is a big influencer when it comes to changing people’s perceptions of cryptocurrencies
- Respondents agreed that more consumer education is required at this early stage in the industry development
South African perspective
South Africa, Indonesia and Malaysia reported higher levels of cryptocurrency familiarity and ownership compared to their European counterparts. Our findings support the trend for emerging markets actively buying into the evolution of money. 69% of South Africans said they were familiar with the concept, almost a third owned a cryptocurrency and more than a half are interested in buying a cryptocurrency in the future.
We couldn’t be happier to see that South African consumers are adapting to meet this new financial system head-on. More than 80% of respondents recognise cryptocurrency as an investment class, and 23% of early adopters use cryptocurrencies for commercial transactions online or in shops.
We found out that almost half of South Africans who participated in the survey are concerned about phishing scams, transaction errors or other security concerns. They agreed that buying a cryptocurrency from a trusted supplier, like Luno, would encourage them to buy more than they do now.
Bitcoin is still the go-to cryptocurrency because it’s still the most well-known cryptocurrency worldwide, including South Africa. A respectable second place goes to Ethereum, despite the rapid rise of popular new altcoins such as Ripple and Dash.
Read the full report
To find out more about the cryptocurrency trends and consumer habits in South Africa, download our full report.