WikiFX report: Luno looks at who is buying crypto in South Africa

Whichever side of the fence you sit on when it comes to cryptocurrency, the fact of the matter is that it is here to stay, finding a particularly strong footing here in South Africa. To provide some insight into who buys crypto locally, Luno has looked at its data.

The crypto trading platform has specifically looked at the some of the demographics and purchasing habits of local buyers, with some interesting and some predictable outcomes.

The first is that the average crypto buyer in SA is likely male, with Lunos data showing that these buyers usually spend around R450 on their first purchase, choosing to hold onto it for at least eight months.

It is not clear what the crypto of choice is, but given the Luno ads featuring former Springbok coach Rassie Erasmus, it is more than likely Bitcoin.

It is unclear if using the enigmatic coach has yield results, but the past year has seen interest in Luno peak significantly.

“South Africa is one of our strongest markets, in fact, South Africans make up about 43% of our verified customers. Over the past year, we verified more than 3 million new users worldwide. As we expand into new territories, the trend is starting to shift,” highlights Richard Ball, lead data scientist at Luno in a press release sent to Hypertext.

Looking closer at the local data, Ball explains that the average amount of the first crypto deposit has increased since a dip in Bitcoin last November.

“Most customers start with a relatively small deposit, while the top 25% of our biggest local customers start to buy crypto at around R1 500 and the highest deposit amount among our smallest 25% of customers is only around R90.”

In terms of popularity in SA, Bitcoin, Ethereum and XRP lead the way, with the latter seeing a sizeable amount of interest of late.

“The greatest increase so far this year in demand is XRP, with a 25% price surge within a single week. USDC, a cryptocurrency linked to the US dollar, is the least popular on Lunos platform, in line with its status as a stable coin,” adds Ball.

“When crypto prices fall, some customers buy into USDC to shield themselves from further market volatility. Once volatility has cooled down, traders will typically move from USDC back into crypto such as BTC. In some sense, this is in line with traditional financial markets where investors avoid risk and move to cash during periods of uncertainty,” he continues.

In terms of the split between male and female buyers, Luno says older demographic when it comes to women is quite intriguing, although the men in general are buying more crypto.

To that end, an estimated 30 percent of the activity in the 18 to 29 age bracket are women, with this figure increasing to 46 percent for the 60-plus bracket.

“Overall, this indicates that South African customers increasingly view crypto as a longer-term investment and are not necessarily buying it to make a quick buck,” he concludes.

While it is often best to only invest what toy are happy to lose when it comes to something as volatile as crypto, it looks like South Africans are quite happy to test the waters with smaller amounts.