Kenyan retail investors held cryptocurrencies worth an average of Sh2,076 ($16.08) each last year, ranking at the bottom of allocation to the alternative assets ahead of Nigeria.
The 2023 digital global overview report by Meltwater, an online media monitoring company shows that Kenya was ranked 39 out of 40 countries sampled on the average annual spend on cryptocurrency per user last year.
Switzerland retail investors topped the list of digital currencies purchased at an average of $960.7 last year and Nigeria was last at $14.76.
The most popular cryptocurrencies are Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Binance Coin (BNB), and US Dollar Coin (USDC) among others.
“Average total value of crypto purchases in 2022 per retail trader who bought any form of crypto in 2022 (U.S. dollar equivalent) in Kenya is $16.08,” the report read in part.
The United Nations Conference on Trade and Development (UNCTAD) estimates that more than 4.25 million people, 8.5 percent of Kenya's total population, own cryptocurrency.
This gives the country a high ranking in terms of participation in the digital currencies market but a low score as measured by the money invested in the space.
Kenya was, for instance, placed ahead of developed economies such as the United States, which is ranked sixth with 8.3 percent of its population owning digital currencies.
UNCTAD linked Kenya’s rising adoption of digital currencies to low fees charged by crypto exchanges, speed in sending remittances and Internet access.
About 12.4 per cent of Kenyans aged between 16 and 64 own some form of crypto with a majority of traders being male, according to the Meltwater report.
The crypto market, known for its wild price swings, has shed more than half of its value since November last year as investors pulled out money from riskier assets amid worries over soaring inflation and rising interest rates.
Investors are buying cryptocurrencies as investments, to preserve their savings or carry out remittances.
Other purposes include paying for goods and services. Transactions through cryptocurrency are seen as convenient and quick and have a strong appeal among those who want to remain anonymous.
Last year the Central Bank of Kenya invited public views on the potential introduction of a digital currency- the Central Bank Digital Currency (CBDC) to offer some benefits, especially in reducing cross-border payment costs.
The introduction of the CBDC is inching closer as the Senate resolved to develop frameworks for their operation in the country.
Crashes in crypto prices have been increasing since the Russian invasion of Ukraine catching traders off-guard.
Bitcoin traders have suffered some of the largest losses.
“We’ve also seen some of the ‘hottest’ digital trends cool over recent months, with rising economic challenges and a series of scandals unwinding much of the recent growth in areas such as cryptocurrencies and NFTs (non-fungible tokens),” Meltwater said.
NFTs are digital assets that represent internet collectables such as art, games and music.
