How Kenyans are making a killing from little understood online cryptocurrencies
Bitcoin and Ethereum are the digital currencies of choice for the many Kenyan traders.
More and more Kenyans are shifting from traditional hard currencies and instead embracing soft cryptocurrencies such as Bitcoin and get a slice of the action from a currency that have revolutionized the world and is posed to be the most dominant currency in the world in the next few years.
More than 1,000 Kenyans are betting big on the little understood, unregulated, global digital currency and putting tens of millions of shillings at stake in pursuit of outsize gains.
Go big or go home seem to be the name of the game.
Bitcoin and Ethereum, whose values have skyrocketed in the past 10 months, are the digital currencies of choice for the many Kenyan traders.
One of such traders is Aerlene Mugambi who quit her job at a local telecommunications company two and a half years ago, like many Kenyan entrepreneurs before her she first dabbed her hand in small businesses but she was no making any headway until she stumped upon the world of digital currency.
“I was doing other things until I realised that you can capitalise on this business of digital currency and make some good returns out of it. This is what I do full time, combining that with going to educate people about Bitcoin, whether they want to buy coins or mine,” Ms Mugambi told a local daily.
Flash forward, fifteen months later Ms Mugambi, has made online digital trading a full time job, earning a monthly income of up to Sh100,000 ($1000) and smiling all the way to the bank, sorry smiling all the way to the next Bitcoin shop.
She is now a member of the AchieversKlub Kenya that is affiliated to global mining unit BitClub Network that has its main facility in Iceland.
Like her, Kenyan traders have also formed clubs to pool their resources and invest in Bitcoins, mainly to do what is known in cryptocurrency lingo as mining.
To join such Bitcoin trading clubs, one must part with a minimum of Sh70,000 ($700) for membership and a starter trading deposit, which translates to a conservative minimum of about Sh70 million ($675,325) invested in the little-understood digital currency.
The Bitcoin craze has become particularly pronounced this year, with a single unit now fetching upwards of $7,500 (Sh772,000), up from $968 (Sh100,000) at the beginning of the year.
Ethereum, a newer entrant into the cryptocurrency space, has risen from $8.10 (Sh834) a unit in January to $322 (Sh33,000) by close of Thursday.
Trading in Bitcoin is however not without risk and traders should always take caution which explains why Central Bank of Kenya while not entirely being against the crytocurrency is still apprehensive in totally welcoming it.
““While the CBK raised the issue that digital currency can be used for illegal activities, the same applies for hard currency. Every digital platform you use to trade has an IP address, therefore every wallet can be traced,” another full time Bitcoin trader, Raymond Kaptich who also quit his job says.
“Saying that you’re on your own in the event of loss of Bitcoin…this applies everywhere, irrespective of whichever investment you make.”
Financial analyst Aly-Khan Satchu says that it only a matter of time before cryptocurrencies are accepted as a legitimate investment class eventualy.
Adding that what has been happening in Kenya is part of a global movement towards the mainstreaming and acceptance of Bitcoin.
“The price volatility is unprecedented though, and investors need to have a sky-high tolerance for risk,” says Mr Satchu.
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