South Africans are amongst the world’s worst savers, according to statics released by World Economic Forum, scoring 15.4% compared to other emerging markets. South African Reserve bank, desires a 25% saving growth, which looks bleak with current economic climate in the country to ascertain.
A further, downgrade rating on the country by international rating agencies, puts a further strain on the economy. Higher price hikes could leave more South African’s destitute with no spare money to save. South Africa is also predominantly a consumption-led economy, rather than investment led one.
As a result of economic pressure, more people are looking for alternatives. One such is the decentralised cryptocurrency market, where more people are finding a safe haven in investing in Bitcoin. Bitcoin is the world’s first decentralized currency, that operates independent of a central bank is designed to deflate over time, oppose to how traditional fiat currencies inflate.
Shireen Ramjoo, Founder of Liquid Crypto-Money, says,“The crypto-environment is already at an almost staggering 100 billion dollar market. There are a few first world countries that have already regulated bitcoin. As bitcoin, promises more gains over a period of time, more people are beginning to save, so that they can cash in a bigger return. As a result we are witnessing more people coming into the cryptocurrency space, and a whole new spectrum of new services in terms of cryptocurrency hedge funds and such type of investments already coming into markets.”
People holding bitcoin are trying to save them for a long period of time, because there is the enticement of higher returns as a result. This new trend seems to be opening up a new way for people to save in the short and long term. Most South Africans don’t have a savings pool to tap into for emergencies, and usually cash out their investment savings, leaving them even more vulnerable in the long run.
“As the cryptocurrency environment becomes more stable and ingrained in our societies, as it is still early days, this however could as well be an alternative method of savings,” concludes Ramjoo.