Paxful has a continuing fruitful relationship with the people of Africa. As of April 2018, Nigeria and Ghana rank second on third among the users of Paxful, trailing only the United States. That means there is a high amount of people trading bitcoin in Africa. But, how much is bitcoin in South Africa? Bitcoin is an essential in Africa because while a total of 1.2 billion people (55.91 million in South Africa as of 2016), 77% of them are unbanked and is in dire need of financial inclusion. In short, bitcoin partly solves this problem by creating their financial passport. Anyone that has internet has access to this. Since 85% (as of 2017) of the African population own a mobile phone, they can carry their businesses through bitcoin.
However, the price of bitcoin in South Africa isn’t as easy to compute as doing a quick Google search for the exchange rate between a South African Rand/ZAR and 1 bitcoin (BTC to ZAR), it would equal to, at the time of writing, 1 BTC = 99,990.95 ZAR. If you do a Google search for the price of bitcoin, the automatic currency would be USD (since some say it’s the “international” bitcoin price). This means that to get the value of bitcoin in Rand, they convert it to USD first, then USD to bitcoin. However, this is not actually the price of Bitcoin in South Africa. The market rate differs from the local bitcoin exchanges in South Africa.
Why does the price differ from Google to a local bitcoin exchange?
An easy answer for why the price changes from Google to the exchanges is that Google works off averages. Google has a certain formula that looks at the prices of bitcoin in several different US platforms. From that, it then calculates the average. This is inaccurate and can confuse a lot of people since the prices of bitcoin in South African exchanges rely on the supply and demand of the buyers and sellers on an exchange. On a bitcoin exchange, the price relies on how much sellers want and how much buyers are willing to give for a bitcoin. For example, if someone wanted to buy bitcoin instantly, then he/she might be willing to pay more than regular since they want their order to be filled first. The same also applies to sellers. Some may want to get cash instantly, so they might be more willing to accept less money.
The number of sellers may also affect the price of bitcoins on exchanges. If there are many sellers, the supply is higher ergo the demand goes down. The demand going down ultimately means that the prices will go down and buying bitcoin will be a lot cheaper. It could also work the other way around. If the demand goes up (meaning there are many buyers looking to purchase bitcoin), that could make the price of bitcoin go up as well.
The supply and demand of the South African market
Supply and demand play a huge factor in the price of bitcoin in South Africa. Supply and demand are what separates bitcoin from fiat currencies. This is what makes bitcoin so unique. In our already existing fiat system, the price of a certain currency can directly affect the price of another currency. For example, if the price of the US dollar increases, it has a direct impact on other currencies, whether that impact is good or bad. When it comes to bitcoin, the opposite is true. If the price of the US dollar increases, then it will have no effect on the price of bitcoin. The supply and demand in the South African exchanges give the users the power to somewhat control the price of bitcoin in their market. This means that the price of bitcoin can vary greatly from one exchange to the next, depending on the individual markets.
What are other factors affecting the price of bitcoin in South Africa?
The supply and demand for bitcoin on bitcoin exchanges are not the only factors that affect the price of bitcoin. There are also fees that are added on top of the transactions that incur on a bitcoin exchange. For example, there are fees on South African exchanges, called withdrawal fees. Most exchanges are actually free to withdraw, but sometimes some exchanges charge a fee. For example, if an exchange charges a fee of 0.005 bitcoin to withdraw (if 1 BTC = 99,990.95 South African Rand, that means the withdraw fee is 499.95475). The equation is simple: just multiply the price of bitcoin to the fee amount. In this case, the withdrawal fee would directly affect the price of bitcoin because of how much ZAR a person would have to pay to get bitcoin. How
The Problems of Not Having A Fixed Price
The price of bitcoin swings so wildly up and down that it becomes a gamble when you start trading. The investment could earn someone a lot of money. At the same time, it could lose someone a lot of money as well. Determining how much is bitcoin in South Africa can be tricky at times. The lack of a standard or specific value for bitcoin allows users to take advantage of the market. A user can start buying on an exchange wherein the price bitcoin is relatively cheap and in turn, sell it on an exchange that pays well for bitcoin. This is called arbitrage trading. For example, if Exchange A has a bitcoin price of 100,000 ZAR and Exchange B has a bitcoin price of 99,000 ZAR, a user could take advantage and exploit the price difference, keeping the extra 1,000 ZAR for himself/herself. This is how some people make money off of bitcoin and some even treat it as a business.
In conclusion, the price of bitcoin in South Africa is always changing. There is no set price for what the rate of bitcoin should be. Meaning there is no certain way to pinpoint how much is bitcoin in South Africa. On the South African exchanges, Bitcoin works on a supply and demand basis. Sellers sell their bitcoin for what they are willing to receive and buyers buy for what they are willing to pay. Because of the lack of a specified value for bitcoin, there is no sure way to predict how it will perform.
Bitcoin can affect your future in more ways than you could have imagined.