Thanks in no small part to an increasingly interconnected digital community, Sub-Saharan African investors have more options at their disposal than ever before.
Examples include traditional stocks and shares, exchange-traded funds, Forex pairs, and commodities.
However, a new class of assets is beginning to make its presence known. Why are crypto-powered investments set to transform the SSA marketplace, and what advantages can traders now employ?
An Abridged History of Crypto Assets
Cryptocurrencies have existed since Bitcoin was first launched in 2009. However, this sector remained relatively obscure until a handful of years ago.
The majority of investors viewed tokens such as BTC, ETH, and SOL as highly speculative in nature and relatively few understood the inherent mechanics.
This all began to change when user-friendly trading tools entered into the mainstream marketplace.
It suddenly became much easier to appreciate how the blockchain functioned, the role of assets such as NFTs (non-fungible tokens), and the ways in which one could hedge against potential volatility.
In other words, both novices and institutional traders alike became intrigued with what crypto tokens had to offer.
The Appeal of Crypto Investments
There are several reasons why African investors are keen to leverage the benefits of the crypto marketplace.
Perhaps the most obvious is the fact that exponential profits can sometimes be realised. The meteoric rise in Bitcoin prices experienced during the latter half of the 2010s is a prime example.
However, others are more interested in how crypto holdings can be used to offset the effects of inflation.
As tokens including Bitcoin and Litecoin are not pegged to benchmark currencies such as the United States dollar, they are ideally suited for volatile market conditions associated with a bearish medium-term outlook.
Yet another appealing aspect of any crypto position is associated with a relative degree of anonymity thanks to blockchain technology.
This is certainly not the case with traditional asset classes such as blue-chip stocks.
As a growing number of African investors are wary of “big brother” and the actions taken by institutions such as central banks, crypto assets have taken on a life of their own.
User-Friendly Trading Platforms
There is little doubt that crypto investments (and financial investments as a whole) can appear daunting to those who do not possess a great deal of experience.
This is one of the reasons why budding traders were hesitant to become involved. The good news is that times have changed.
Thanks to the presence of reputable multi-asset management firms such as Exness, it is now much easier to appreciate the finer points.
From technical tools such as a moving average convergence divergence (MACD) calculator to user-friendly candlestick charts, and social media signals, understanding seemingly complicated topics has become much easier.
24/7 Market Access
Yet another limitation that many African traders faced in the past was associated with logistics alone.
Internet access was rather limited in the past; directly impacting how often trades could take place and making it difficult to execute real-time orders with a high level of reliability.
Things have already begun to change thanks to infrastructure improvements, and the increased presence of wireless connectivity (especially within major metropolitan areas).
Traders can now partner with reliable firms in order to maximise profit margins while keeping abreast of the latest market movements.
Variations in the Thread Strengthen the Weave
To be perfectly clear, crypto assets are not the only types of investments that will soon experience a “golden age” throughout Sub-Saharan Africa.
They should instead be used as another means to create a balanced portfolio.
For instance, any short-term gains associated with BTC or ETH holdings can be used for the bearish movements of other asset classes such as mainstream stocks or Forex pairs.
Crypto tokens are also potent tools for those who are hoping to add a sense of liquidity to their existing portfolio.
We should nonetheless note that crypto investments must never be oversimplified.
There are many facets to take into account when trading, and some of these are much easier to grasp than others.
This is why many institutional African traders are choosing to work in tandem with internationally recognised multi-asset management firms.
These third-party intermediaries possess the talent and experience required to make informed decisions at the appropriate times.
Either way, it will therefore be interesting to see how the digital marketplace continues to shape the Sub-Saharan economy over the next few years.
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