Despite the recent collapse of the cryptocurrency market, the African blockchain industry has garnered numerous financing, with venture capitalists (VCs) continuing to gamble on the sector’s future.
Nation reported on August 3 that African blockchain businesses obtained $304 million in investment during the first half of 2022, nearly three times the $127 million they received in all of 2021.
During the first three months, venture capitalists invested $91 million in various enterprises, which grew by 134 percent to $213 million in the second quarter. Curiously, the crypto market experienced one of its worst returns during the second quarter, led by Bitcoin (BTC), which fell by 56 percent over the period.
KuCoin dominates financing
The Seychelles-based cryptocurrency exchange KuCoin raised a record $150 million in investment rounds. The investment was Africa’s first “mega transaction” in blockchain technology.
In addition, the Pan-African cryptocurrency exchange Mara raised $23 million, and the Jambo company raised $30 million. Afriex, a Nigerian company, raised $10 million over the second quarter.
Despite the record financing, Africa accounted for just 0.5% of global blockchain formation in the first half of 2022.
According to the African Blockchain Report, the continent’s crypto industry is mainly driven by the region’s economic difficulties, such as growing inflation and depreciation of native currencies.
According to the survey, “the absence of shared legacy financial systems and a large population that is mostly unbanked all contribute to the popularity and expansion of cryptocurrencies throughout the continent.”
Increased cryptocurrency popularity in Africa
Residents of several African nations are increasingly adopting cryptocurrencies to incorporate them into their everyday financial transactions. With a Google trends search score of 371, Nigeria is the most cryptocurrency-obsessed nation in the world, as revealed by Finbold on August 3.
Despite the current market crash, investors are exhibiting interest in digital assets in anticipation of a future rebound.
Following the concentration of crypto investors in Africa, the regulatory frameworks of the majority of nations remain hazy. Countries like South Africa intend to regulate and incorporate the industry into the mainstream banking system.