One major BTC exchange in South Africa reported $97 million worth of trading between Friday, 11 August, and Sunday, 13 August. Leading up to the fork when Bitcoin split into Bitcoincash (BCC) and Bitcoin (BTC), uncertainty was rife. South African traders were averse to delving into this highly volatile market until a clearer direction was established.Bitcoin costs R53,063.34 per unit in SA
Blockchain technology is characterised by its decentralised nature. In other words, the protocol and framework that governs BTC creation, trading and activity is not centralised on a single server, or controlled by any regulatory authority. All Bitcoin users have a degree of control over the network, making protocol upgrades exceptionally difficult to implement.
Current uncertainty was attributable to the lack of knowledge about which way BTC would trade. Post fork, Bitcoin performed well and maintained pricing above $4,000 per unit. BCC has not been as strong a performer, and is trading approximately seven times less than BTC ($609.69 on 21 August 2017). The market capitalisation of BCC is approximately $10.07 billion, while the market capitalisation of BTC is $66,541,718,948 ($4,028.19 on 21 August 2017). For South African traders, it is particularly expensive to buy BTT or BCC, given the current exchange rate of 13.1709. A single Bitcoin at that rate would cost R53,063.34. Trade24 financial expert
Jacques Pienaar believes that the South African market has yet to fully mature when it comes to digital currency trading: "We are in the infancy stages of BTC trading, investment and adoption in South Africa. While the market has shown strong signs of growth recently, it pales in comparison to other markets in Asia such as South Korea, Japan and the Philippines. South Africa is a niche market for BTC and BCC, and we are confident that traders will incorporate this contrarian financial asset in their portfolios moving forward." Regulation nation: SA seeks solution to BTC trading
Cryptocurrency trading regulations in South Africa are nebulous. Regulators are being questioned about how best to go about creating a framework within which trading activity can take place. Blockchain technology is adopted by banks and financial institutions across the board, but South Africa has yet to create a structure that is acceptable for the new paradigm.
Effective immediately, the government has initiated full-scale testing of blockchain technology and digital currency options, with a regulatory sandbox. If the regulatory measures are approved, this will help to propel BTC and cryptocurrency into the mainstream.
Money is flowing into digital currency trading in South Africa, and there is a vast untapped market waiting for investors. Digital currency experts have postulated all sorts of theories, ranging from a selling price of $25,000 per unit by 2022, to as much as $50,000 per unit by 2040. Whether these hypotheses come to fruition is anyone’s guess, given that regulatory constraints could pull the rug from under cryptocurrency, or allow it to flourish.
One of the challenges in South Africa remains protecting digital currency trading from being abused by nefarious groups such as terrorists and drug dealers. For now, BTC trading is short-term bullish, and given the meteoric rise in popularity in August, Q4 2017 is an exciting time for South Africans and digital currency