How Africa’s largest native crypto exchange thrived post-FTX
The collapse of FTX with filing for bankruptcy on 11 November 2022 sent a ripple effect across the world including Africa. But VALR, a South African crypto exchange, made huge progress at the same time.
Apart from the fact that a lot of Africans used FTX exchanges to trade and save their money, the exchange also had lots of investments in firms such as Nestcoin of Nigeria, Kenyan-based firms – remittance company Chipper Cash, and digital finance start-up Mara.
According to the findings from the bankruptcy filing, FTX owed over $3 billion to one million creditors which includes Africans with the company’s former CEO, Sam Bankman-Fried, saying that there was not enough money to pay all its debts.
More users on VALR
In the midst of the permeating bearish sentiments in the crypto market in Q4 2022, CV VC showed that South African VALR had a good time as more users visited its platform and started using its services. VALR is a South African cryptocurrency exchange that allows users to buy, sell, and store various cryptocurrencies. It was launched in 2019 by a team of experienced entrepreneurs with a vision of making cryptocurrencies accessible to everyone.
VALR’s user interface is user-friendly and straightforward, offering features such as zero-fee trading for makers, multiple order types, and security measures. Additionally, VALR has partnered with a banking institution to offer users a fiat on-ramp and off-ramp service and has implemented measures to ensure compliance with South Africa’s financial regulations.
CV VC further explained that VALR maintained its trading volumes similar to what it had in the same period, 2021. The exchange had a trading volume of over “$480 million or R8 billion in November 2022, with a significant increase in unique monthly visitors to VALR.com, more than 110,000″. In the report, it was also noted the increase continued into 2023 with more than 10,000 sign-ups each month.
Luno and VALR share South Africa’s crypto trading volume
Aside from VALR, Luno is another exchange in South Africa that shares the trading volume with VALR. Luno is a cryptocurrency exchange platform founded in 2013 by Marcus Swanepoel, Timothy Stranex, Pieter Heyns, and Carel van Wyk. It’s headquartered in London with branches in Johannesburg, Cape Town, Singapore, and Kuala Lumpur.
Seven years after its launch, it was acquired by Digital Currency Group (DCG), a venture capital firm that invests in blockchain and cryptocurrency-related companies.
Again, in the CV VC report, South Africa, with daily trade of $25 million, leads the African market based on the volume of trading on centralized exchanges. This figure is heavily distributed with Luno and VALR as well as with Binance which got into the South African market in 2022. “VALR presently accounts for ±50% of the exchange volume of trade against ZAR, followed by Luno with about ±33% and Binance with ±10%,” CV VC said.
Increase in stablecoin and BTC/ZAR trading
In addition, CV VC noted that the BTC/ZAR pair continues to dominate trade volume in the nation with the USDC/ZAR pair gaining popularity in the fourth quarter of the year. This pattern spread across the continent, as well as on other exchanges and OTC desks.
The demand for USD stablecoins as a mechanism of wealth storage, transmission, and exchange in Africa also increased dramatically in 2022 and continues to rise into 2023. Some contributory factors include difficulties in accessing the US dollar and weaknesses of local currencies which drove the demand for US dollar-based stablecoins. This is why VALR trades up to $3.5 million in USD stablecoins every day and initiated USDT (Tether) trading pairings – USDT/ZAR – for traders in 2022.
From the figures presented, VALR is Africa’s largest local crypto exchange, and its resiliency in a difficult year shows that people recognize the value and necessity of digital assets. In 2022, the crypto sector was attacked, but there is still demand for digital assets.
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