Online Searches for ‘Bitcoin’ – Why is South Africa One of the Leading Inquirers?

Compared to the rest of the world, South Africa is really interested in Bitcoin. Some say the recent (but brief) recession boosted South Africans’ crypto appetite. Could that really be the case? Or is South Africa scared of becoming a second Zimbabwe? Perhaps South Africans have a greater appetite for speculation? Let’s crunch the numbers and apply some logic…

 

Online Searches for ‘Bitcoin’ - Why is South Africa One of the Leading Inquirers?

 

What About the Economic Recession in 2018?

 

The recent recession (early in 2018) in South Africa is not likely to have had a meaningful impact on South Africa’s interest in Bitcoin. Of course, there were some uninformed people who grabbed Bitcoin in an attempt to hedge themselves against the recession. However, the recession was not an important driver of SA’s interest in Bitcoin.

 

So how can we be sure that 2018’s recession is not responsible for South Africa’s strong interest in Bitcoin, compared to the rest of the world? Well, not only was South Africa the top worldwide ‘Bitcoin’ inquirer in 2018, but also over the last 5 years. Let’s take a look at Google Trends data:

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

 

Could it be South Africa’s Political Instability?

With the recent recession eliminated, could the political situation in SA be the reason for its relatively high interest in Bitcoin? Bitcoin has been around for 10 years and during this time, SA has always been more interested therein than most other countries. SA has certainly not enjoyed political stability over the last decade…

 

Some may reason that this instability could have driven South Africans to Bitcoin. However, Bitcoin itself is an unstable and extremely volatile asset. But humans make mistakes and many times cleave to their own beliefs and biases. And in the process, they sometimes pour money into what they esteem to be “one of the safest assets” or “a powerful hedge against the rand and other fiat currencies”.

 

You see, it is really irrational to put your trust in Bitcoin in times of instability. After all, how stable could we expect Bitcoin to be? It has hardly been around for 10 years and has displayed monstrous volatility so far.

 

My point is that South Africa’s instability isn’t a good reason for people to be drawn to Bitcoin. If you really need a hedge against a weakening rand or other adverse economic circumstances, there are many other options besides Bitcoin. And by the way, Bitcoin lost about 75% of its value in 2018. That 75% loss did not hedge anyone against anything!

 

Tax Evasion and Other Illegal Activities

Bitcoin appeals to some tax evaders and criminals because its transactions are pseudo-anonymous. It can also be sent basically anywhere in the world without passing through banking channels where South African Revenue Services (SARS) could notice it. Many South Africans love to evade tax, and it may be thought that South Africa’s interest in Bitcoin could have something to do with tax evasion.

 

However, many other countries around the world also abound with tax evaders, so SA is not unique in this regard. And besides that, there are many other ways to evade tax in South Africa. Also, getting Bitcoin without buying it on a cryptocurrency exchange with funds from your personal bank account is not a viable option for everyone and is sometimes very expensive.

 

While tax evasion has without a doubt drawn some South Africans to Bitcoin, it is certainly not the most important influencing factor.

 

Do South Africans Fancy Bitcoin for Peer-to-Peer and International Money Transfers?

“Bitcoin is a really cheap and convenient way to send money abroad”. Really? If you need to send money abroad, why not just go to your bank and request an international transfer? It’s much cheaper than converting rands to Bitcoin, sending the Bitcoin abroad, and then converting Bitcoin to that country’s fiat currency.

 

Perhaps the recipient will use the Bitcoin directly which eliminates a Bitcoin-to-fiat conversion. Well, in that case, it is usually still more expensive than just sending rands abroad with your bank handling the currency conversion.

 

Besides the high cost of fiat-to-Bitcoin and Bitcoin-to-fiat conversions, it is also more cumbersome than just using your bank or even Paypal to move money to other countries. Plus, when using traditional methods, you don’t have any risk of losing your private keys. Losing a private key makes your own Bitcoin unaccessible to you, which means that you have actually lost your Bitcoin.

 

Concerning peer-to-peer money transfers, using Bitcoin for that can also be impractical in many cases. We should also not forget that Bitcoin’s excessive price volatility greatly reduces its potential as a reliable payment medium or store of value.

 

Surely, some South African people have investigated Bitcoin as an alternative means to move money. However, this is very unlikely to have distinguished SA from the rest of the world, in terms of search numbers.

 

You May Also Like: Where and How to Buy Bitcoins with Cash

 

What About SA Being an Emerging Market?

Google Trends data reveals that over the last 5 years, emerging markets have dominated the search for Bitcoin. Let’s zoom in on the chart above:

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

 

These top 5 countries, South Africa, Nigeria, Ghana, St. Helena, and Slovenia are all emerging markets. Really interesting! And of these countries, 3 are in Africa. Of course, St. Helena is just about 1900 km from Angola in the Atlantic Ocean. We can almost say it’s part of Africa.

 

With this data in mind, it seems like South Africa being an emerging market plays a more significant role in its relatively high interest in Bitcoin than any of the other 4 factors mentioned up to this point. But let’s see what else influences Bitcoin popularity…

 

Speculation and Investment Purposes? Definitely!

What else could have boosted South Africa’s interest in Bitcoin? Well, the most important factor that has influenced global Bitcoin popularity is its price. In fact, Bitcoin’s price is highly correlated with the number of online searches for the word ‘Bitcoin’. Take a look at these two charts:

 

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

When Bitcoin hit an all-time price high in December 2017, the worldwide interest in Bitcoin also printed an all-time high. But why does this matter? Well, when the price of Bitcoin moves higher, people show more interest in it. This tells us that people are interested in Bitcoin because maybe they can make some money out of it.

 

Surely, many people who searched for Bitcoin were just curious, but a multitude of people were drawn to it because of the magnificent gains it produced in a really short time. Some of the early Bitcoin investors literally made millions of percent return on their investments! Of course, the early Bitcoin miners who stacked up their Bitcoin also made really impressive gains.

 

Now that we know that the world is primarily interested in Bitcoin for investment and speculative reasons, we should ask ourselves an important question. Does South Africa have a bigger appetite for Bitcoin speculation than the rest of the world? That is the logical assumption, right? But let’s look at Google Trends data of online searches for the phrase ‘trading Bitcoin’ to make sure of this…

 

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

Here we can see that when it comes to ‘trading Bitcoin’, South Africa is far ahead of Nigeria and all other countries in the world.

 

By the way, South Africa is generally more interested in online speculation than Nigeria, Ghana, and St. Helena. When we examine Google Trends search data for ‘forex trading’, ‘stock trading’, and ‘trading commodities’, we find that South Africa is in the top 5 with these 3 phrases. However, Nigeria, Ghana, and St. Helena are not seen within the top 5 places. Look at this:

 

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

It is evident that South Africa likes to speculate, trade, and invest! Not only do South Africans like Bitcoin, but also forex, stocks, and commodities.

 

Conclusion

South Africa is one of the leading emerging markets in Africa. This, combined with South Africa’s incredible appetite for speculation, are the most important reasons why South Africa lead the world in online Bitcoin inquiries over the last couple of years.

 

“…over the last 5 years, emerging markets have dominated the search for Bitcoin.”

“In fact, Bitcoin’s price is highly correlated with the number of online searches for the word ‘Bitcoin’.”

“It is evident that South Africa likes to speculate, trade, and invest!”

 

About the author:

Online Searches for ‘Bitcoin’ - Why is SA one of the Leading Inquirers?

Eric Furstenberg, co-author at www.tradeforexinsa.co.za is a versatile entrepreneur, speculator, and technical writer. He also develops trading robots and has extensive experience in online trading.

For more crypto articles by Eric and his colleagues, please visit www.tradeforexinsa.co.za/crypto/crypto-education/.

 

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