Bitcoin Shakes Up the Money Supply in Central America and Africa (Op-Ed)
Efforts to expand Bitcoin development and adoption in Africa and Central America continue.
So the market looks pretty comfortable with BTC after the failures of Silicon Valley Bank and others with crypto exposure. After shocking customers, markets and regulators earlier last month, their effect on BTC’s market cap seems priced into the momentum.
While the crypto interest rate crash and bank runs have failed to keep bitcoin’s price down, something is pushing it higher. There is industry development and user adoption happening all over the world. Two of the most promising regions for crypto growth are Africa and Central America.
In Africa, home to some of the world’s poorest countries, around 50% of the population is unbanked today. That means they have never had a checking account, credit card or access to any banking services, and Bitcoin fixes this in many ways.
Africa and Central America growth, Bitcoin tailwind
Andrew Lokenauth, the author of the popular investor newsletter “Fluent in Finance”, wrote recently, “Many African countries are experiencing high inflation, making Bitcoin a more stable store of value.” He highlights Lightening Network’s low-bandwidth, low-cost BTC payment platform as a game changer for Africa:
“The Lightning Network is a layer-2 scaling solution for Bitcoin that can help make Bitcoin more accessible and affordable in Africa. The Lightning Network enables users to send and receive Bitcoin payments quickly and cheaply, even with low internet connections.”
Lokenauth also reports that Lightning Network developers in Africa are working on ways to expand BTC L2 there. For example, Kgothatso Ngako has built an app in South Africa that allows users to send BTC via text without internet.
The size of the market and the acceleration of its growth is incredible. Mobile network operating data shows that money transactions sent over mobile in Africa rose 39% to $700 billion in 2021.
Cryptocurrency is also taking hold in Central America. Earlier in March, a leading Latin American travel agency and Binance Pay partnered to enable crypto payments for travelers.
Meanwhile, President Nayib Bukele’s government in El Salvador has rebuked crypto-skeptics for not saying anything about its official adoption of BTC. The government recently showed its financial strength with the repayment of one of two outstanding bonds of 800 million dollars.
Bottom Line: These are bullish factors for BTC
Bitcoin’s spot price had barely broken above $17,000 for months at the start of last quarter. Heading into Q2, it’s emerging from the woods after the long crypto winter. In fact, price momentum over the past month has analysts now wondering when BTC will break above $30K again.
Bitcoin continues to defy the obituaries and escape US regulatory abuse. The price is showing strength and bullish trends because BTC has a large, diverse and carefully invested set of key stakeholders. They continue to drive development and adoption in the first world and developing countries in 2023.
