Is Cryptocurrency Investing in Kenya Profitable?

Cryptocurrencies have been with us for a while now. They are a perfect symbol of what technology can do even to the very basic of our financial system, Money. Today, the majority of people have either heard about them or are planning to invest. However, is Cryptocurrency investing in Kenya profitable?

To begin with, this is a tough question to answer. I don’t want to be among those fake investors who promise to make you a millionaire overnight. Because it is not true. If it was, they would not need you. It is that simple.

However, before answering the question of whether cryptocurrency investing in Kenya is profitable, let us seek to understand what cryptocurrency is.

What is Cryptocurrency?

Most analysts refer to it as a new form of digital money. My understanding though tends to see them as more of technology rather than money. They are made through a new ledger technology that uses decentralization and lack of control as the key driver.

This technology is known as the blockchain. Although the concept has been with us for a while, it came to the limelight with the launch of Bitcoin (the first cryptocurrency) in 2009 by Satoshi Nakamoto.

In the white paper, Satoshi did introduce this new idea systematically to the global audience. I have to admit that at this time, few people took notice until later when people started realizing what Satoshi created and its potential impact on the global financial system.

In it, Satoshi had set the pace for an idea that over a decade later would create a 2 trillion-dollar market and threaten the well-protected global financial system. This has not only made blockchain famous but also lead to the introduction of thousands of cryptocurrencies in the market.

Bitcoin on the other hand continues to dominate the market not only in fame but also in market value.

Cryptocurrency as an investment asset

After going mainstream, investors quickly took notice and realized the potential in these assets. I would confidently say that cryptocurrencies have succeeded more as investment assets than as transactional currencies. It is easier to invest in them today than to transact.

With millions of investors having some interest in these assets, it is only logical to assume there must be a catch. And yes, there is. This huge uptake and surge in demand have made their prices and value grow so fast that some analysts call it the new gold rush.

Advantages of Investing in Cryptocurrencies

• Young market

Barely a decade old, the cryptocurrency market is very young in comparison to its peers such as the stock or the commodities market. This makes it lucrative to invest and grow with it.

Its explosive growth has already created a few millionaires with analysts predicting there are more opportunities to open up in the future. Hence, if you are planning to invest in cryptocurrencies, you are still on time.

• Increase in the Investment platforms

Today, there are thousands of platforms that you can use to invest in cryptocurrencies across the world. This makes it easier for potential investors by offering them a choice.

The increase has also made it cheaper due to the competition that has made the brokers lower the transaction fees.

Challenges of investing in cryptocurrencies

Investing These assets also have some share of challenges as below

• Legal challenges

Perhaps this is one of the biggest threats to cryptocurrencies today. The majority of governments and other industrial players are yet to agree on a common legal framework for cryptocurrency operation.

This increases the risks of investing in them due to a lack of legal protection. An increase in risk increases the chances of losing your investment in comparison to other assets.

• Low utilization Levels  

Cryptocurrencies are still struggling to achieve their main creation objective of utilization. The number of people using them for day-to-day transactions remains low compared to other alternatives such as fiat currency.

This is due to various challenges and limitations such as

1. Low transaction speeds
2. High transactional costs
3. Underdevelopment in the supporting infrastructure

Low utilization is a major hindrance for the cryptocurrencies to achieving their key objective and could eventually affect their value in the market.

Opportunities in the cryptocurrency market

Although there have been some challenges so far in the development and growth of cryptocurrencies, they have some unique opportunities that could sustain growth in the future.

• Government support

There are signs that governments are starting to take notice of this growing market. Some countries are already in the process of enacting regulations to control and protect investors. A step that could in the long term attract institutional investors and help drive the market higher.

• Decentralization

The concept of decentralization will also be key in the consumption growth of these assets. This is because they eliminate third parties that make their usage costly and slower. Decentralization also helps enhance privacy due to the nature of blockchain technology helping reduce fraud levels.

So, is cryptocurrency investing in Kenya profitable?

The answer to this question is yes. However, just like every other investment asset, profitability is not a guarantee. You have to follow the market rules such as risk management and market analysis to get it right.

Some investors though are joining the market with the expectation of becoming overnight millionaires. However, this is not viable. You need patience and emotional control to make it in the market.

High volatility levels make it a high-risk market that requires experience and good risk management strategies to maneuver. 

A key point to note is that all cryptocurrencies have a key supporting technology. Some are made as transactional currencies, others are meme coins while some support metaverse technology. You should carefully evaluate all these are elements before investing in the crypto market.

This rush is also increasing fake currencies. These are fake cryptos whose is to swindle investors’ funds. To avoid such frauds, you should only invest in coins that are well established and have the support of major brokers.

Conclusion

Profitability should be the last element to focus on when investing in cryptocurrency. Other elements such as market research and knowledge should come first. With good understanding of these elements, the answer to if cryptocurrency investing in Kenya is profitable is definitely a yes.

However, you can also choose to invest through professional investors although this comes at a cost.