The cryptocurrency industry is experiencing one of its greatest upheavals with billions worth of unconventional assets disposed of in under three days, sending jitters across the market, including in Kenya where millions have invested in the sector.
Cryptos are digital currencies that aren’t issued by any central monetary authority and are known to be borderless but also highly volatile.
In Kenya, it is estimated that at least four million people own cryptocurrencies, most of whom are speculators, and use them as a means of wealth creation, according to multiple studies by blockchain analysis firms Chainalysis and Tripple A.
Since last Wednesday, the crypto market has been in a downward trajectory, and crypto owners have since liquidated over $500 billion (Sh64 trillion) in just three days, the highest amount ever sold in such a short time, according to market tracking firm CoinMarketCap.
The total cryptocurrency market capitalisation has been near record highs most of this year, following the US’ licensing of Bitcoin exchange-traded funds (ETFs), which generally improved market sentiment on digital assets.
But it has now dropped by over 35 percent in under three days, sending jitters in the unconventional market that’s largely unregulated across the globe. Analysts attribute it to the turbulence in the global equity markets.
“This sharp downturn mirrors a broader faltering in the equity markets, where the S&P 500 (Standard and Poor’s 500) dropped by as much as 4.4 percent over the same period,” said an analyst at CoinMarketCap.
“Major companies such as Microsoft and Intel reported lower-than-expected Q2 results, while market leader NVIDIA faced headwinds due to expectations of impending interest rate cuts in September.”
The slump appears to have caused jitters among Kenyan investors and prospectives, most of whom have taken to the internet in search of information on the various cryptocurrencies.