South Africans are among the world’s worst savers, according to statics released by the World Economic Forum. South Africa scored 15,4 percent compared to other emerging markets. The South African Reserve Bank desires a 25-percent saving growth, which looks bleak with current economic climate in the country.
A downgrade rating on the country by international rating agencies puts a further strain on the economy. Higher price hikes could leave more South Africans destitute with no spare money to save. South Africa is also predominantly a consumption-led economy, rather than investment-led one.
As a result of economic pressure, more people are looking for alternative ways of growing their nest egg. One such alternative method is the decentralised crypto-currency market, where more people are finding a safe haven in investing in Bitcoin. It is the world’s first decentralised currency that operates independent of a central bank.
Shireen Ramjoo, founder of Liquid Crypto-Money, says: “The crypto-environment is already at an almost staggering 100 billion dollar market. There are a few first-world countries that have already regulated Bitcoin. As it promises more gains over a period of time, more people are beginning to save, so that they can cash in a bigger return.”
“As a result we are witnessing more people coming into the crypto-currency space, and a whole new spectrum of new services in terms of crypto-currency hedge funds and such type of investments already coming into markets,” she adds.
People holding Bitcoin are trying to save them for a long period of time, because there is the enticement of higher returns as a result. This new trend seems to be opening up a new way for people to save in the short and long term.
Most South Africans don’t have a savings pool to tap into for emergencies, and usually cash out their investment savings, leaving them even more vulnerable in the long run.
“As the crypto-currency environment becomes more stable and ingrained in our societies (it is still early days) it could be an alternative method of savings,” Ramjoo concludes.