The crypto market is recovering after a recession that saw investors incur billions of dollars in losses.
Market or financial research institutions estimate that the number of cryptocurrency owners in East Africa is currently around 12 million.
Tripple-A, a Singaporean cryptocurrency research firm, estimates that 11.7 million East Africans own cryptocurrencies: 6.1 million in Kenya, 2.3 million in Tanzania, and 2 million in the Democratic Republic of the Congo.
But these numbers, according to some analysts, paint a picture of a crypto-aware and mostly financially literate community, which is not the case in East Africa.
David Gitunga, founder of BitcoinKe, a Nairobi-based blockchain and cryptocurrency media hub, stated, East African Their interaction with people in the region reveals that few are familiar with cryptocurrencies and many have no interest in them.
“Ownership of cryptocurrencies is largely determined by knowledge and need. Most people still do not know how to set up a wallet. At the same time, there is no need to own cryptocurrencies, especially in a bear market,” he said in a written response.
Gitonga’s sentiments are consistent with a 2019 study in Spain, which revealed that 84 percent of the differences in crypto use are explained by social impact, perceived risk and expected expectations, all of which relate to awareness and financial literacy.
Another research conducted in Malaysia and published by Technology in Society Journal last month also showed that the level of understanding of cryptocurrencies played an important role in determining their adoption, along with social impact and attitude.
According to a survey conducted by the Technical University of Mombasa in Kenya, the level of participation in the cryptocurrency market, especially among the youth, is well below the level of awareness. The survey revealed that 97 percent of Kenyans between the ages of 18 and 34 are familiar with cryptocurrencies, but only 24 percent are involved in the markets.
Mr Gitunga said levels of awareness are much lower among the elderly and rural residents, who are less financially literate, as evidenced by the Kenya National Bureau of Statistics 2021 Financial Access Survey.
As such, said Mr. Gitunga, it is unreasonable to say that cryptocurrency holders in Kenya number over six million, while 74 per cent of the adult population in Kenya is financially literate.
The most reliable source of cryptocurrency ownership data is from cryptocurrency exchanges. Currently, the Kenyan market is dominated by peer-to-peer (P2P) exchanges and by their numbers active user accounts are often trading less than 100,000 across all these exchanges,” said Mr. Gitunga.
Triple-A did not respond to our query about how they accessed their statistics on crypto ownership in East Africa and whether they conducted any initial survey to verify their data.
There is no raw data
According to their website, they evaluated 16 reports and surveys to access their statistics and not the accounts registered with the cryptocurrency exchanges in the region.
In addition, none of their reports mentioned whether there was specific primary data collection in the area.
Chainalysis, an American cryptocurrency research firm whose statistics are also often quoted, does not use the number of registered accounts to determine its cryptocurrency ownership statistics. Instead, they evaluate the volume of transactions made in African currencies on popular exchanges.
Most of the research on cryptocurrency ownership is biased because it seeks to attract investors for funding. It is also mostly done by foreign companies that compile the wrong numbers that are not validated.”
Our attempts to access data on the exact number of accounts registered in East Africa were futile. According to Mr Gitonga, there are around 500,000 active accounts registered in Kenya, barely a tenth of the estimate.