Kenya leads the continent in cryptocurrency adoption, according to a new report by the United Nations Commission on Trade and Development (UNCTAD).
4.25 million Kenyans, representing 8.5% of the population, own various cryptocurrencies. On the continent, Kenya is followed by South Africa and Nigeria with 7.1% and 6.3% of their populations respectively owning digital currencies.
UNCTAD ranked Kenya sixth globally in crypto adoption. Top on the list is conflict-hit Ukraine (12.7%), followed by Russia (11.9%), Venezuela (10.3%) and Singapore (9.4%).
The data indicates that numerous Kenyans find themselves exposed to the recent decline in the crypto market. Several cryptocurrencies have lost much of their value as investors dumped riskier assets in the wake of the global economic downturn.
The crypto market has shed more than half of its value since November 2021. A number of crypto exchanges have in recent weeks also suspended withdrawals, worsening investor fears.
This week, Singapore-based crypto lending platform Vauld suspended withdrawals, trading and deposits on its network. CEO Darshan Bathija disclosed in a blog that the company has seen significant customer withdrawals since June 12, amounting to $198 million.
He noted that the difficult market conditions were exacerbated by TerraUSD’s collapse, Celsius’ withdrawal freeze and Three Arrows Capital’s loan defaults – events which have spooked the market.
Many Kenyans own crypto for various reasons. For some, trading crypto offers opportunities for quick profits. Others view it as a long-term investment and are hoping the prices of cryptocurrencies will rebound strongly.
“The returns from cryptocurrency trading and holding are, as with other speculative trades, highly individual. On balance, they are overshadowed by the risks and costs they pose in developing countries,” UNCTAD noted in its report.
In Kenya, like most countries, the crypto market remains unregulated.