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Should You Buy Cryptocurrency in South Africa?

In 2010, very few people knew what cryptocurrency was. It was only a few insiders and enthusiasts that knew about and even owned cryptocurrencies, today cryptocurrency is one of the hottest topics in the world. Whether you are looking to trade cryptocurrency or invest in it, you probably have a few questions. The main question we hear is should you invest in cryptocurrency?

Before we get any further, we just need to ensure you have read and understood our disclaimer. Cryptocurrency is a volatile market and while you can make money, you can also lose money if you are not careful. We urge you to make the necessary research and make an informed decision.

What is Cryptocurrency?

Bitcoin was the first recorded cryptocurrency and was created in 2009 by a group/ person known as Satoshi Nakamoto. There are mixed reports as to if this is a group or an individual. The currency was designed to make peer to peer transactions easy, fast and inexpensive. It was also created to be more transparent.

Cryptocurrency runs on Blockchain. Blockchain is a system that records transactions in blocks. These blocks are split up and stored in multiple locations on computers known as mining. Mining is the processing of transactions and miners are rewarded by being awarded Bitcoin.

Because of the blocks being split and stored in multiple locations, they are basically indestructible. All transactions are also recorded on a public ledger making every transaction traceable.

Cryptocurrency Trading Platforms South Africa

Trading cryptocurrency is popular as it allows traders to make money off short term price changes and movements. Trading is often focused on the short term and often you do not own the actual currency, rather you own a CFD (Contract for Difference) or derivative.

To trade cryptocurrency you need to use a broker. Two South African cryptocurrency trading platforms are Luno and Blackstone futures. Blackstone futures offers more in terms of other assets to trade, while Luno makes the crypto trading process simple by having a mobile app.

Cryptocurrency Wallets? (Where can you buy crypto?)

While trading sounds like fun, it is difficult and time consuming. So what if you want to buy for the long term? Then you would need to buy cryptocurrency and store it in a secure wallet. A wallet is similar to a bank account as it allows you transact in the cryptocurrency.

Luno is hands down the best cryptocurrency wallet in South Africa. They make the process easy and simple and have all the regulatory licenses. Their Luno app is available on both Android and iOS, making it easy for you to buy and transact with crypto from your phone.

Can You Include Cryptocurrency in Your Portfolio?

So the big question is, can you include cryptocurrency in your long term investment portfolio. The answer is yes, but it does depend on your risk profile. Cryptocurrency is a very high risk and volatile asset. It is also something that many do not understand. So while it may work in some people’s portfolios at low volumes, it may not work for others. The best idea is to do some research and speak to the professional before you make a decision.

Luno have a great blog with lots of information around buying and investing in cryptocurrency. Check out their blog to gain some more insight.

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Should You Buy Cryptocurrency in South Africa?
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Should You Buy Cryptocurrency in South Africa?
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What is cryptocurrency and how do you buy it in South Africa? This new age of currency may have good returns, but is it for you?
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Once A Week Blog
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