Up to 4 million Kenyans are soaking in losses as Bitcoin value crashes. The four million are investors who have poured their money into cryptocurrencies.
The majority of these have invested in Bitcoin, whose value has fallen to below USD 20,000 (Sh. 2.3 million).
The general crypto market that is known for its wild price swings has shed more than half of its value since November 2021.
This crash has been made worse by current fears that the world is entering into a recession with interest rates hitting all time highs.
According to blockchain analytics firm Chainalysis, which ranks countries on crypto adoption, Kenya currently has about four million crypto-investors. Chainalysis relies on web-traffic data to P2P platforms to track crypto usage in different countries.
Over the past one week, Bitcoin and Ether which are the world’s two most popular cryptocurrencies have gone down more than 35%.
The carnage in the crypto market is partly caused by pressure from macroeconomic forces, including spiraling inflation and a succession of Fed rate hikes. The market has also seen these blue chip cryptos track equities lower.
It doesn’t help that crypto firms are laying off large swaths of employees, and some of the most popular names in the industry are facing solvency meltdowns.
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Bitcoin peaked at $68,789.63 in November. Ether peaked at $4,891.70 that same month. Bitcoin last traded this low around December 2020.
Bitcoin still sits 70% below its all-time high, hit in November. It’s down 57% year-to-date. Many have suggested a market bottom could be close, but with so much economic uncertainty remaining, bitcoin still has more downside potential, according to Yuya Hasegawa, a crypto market analyst at Japanese bitcoin exchange Bitbank.
The Central Bank of Kenya has been opposed to investments in cryptocurrencies. The CBK argues that cryptos pose a significant challenge to the stability of the financial markets.