Interest in Bitcoin Soars in Egypt Amid Economic Crisis and Unemployment
A growing number of Egyptians are reportedly turning to bitcoin amid rising unemployment and the economic crisis. An Egyptian bitcoin community is seeing a huge spike in the number of members interested in bitcoin mining and trading.
Egyptians Increasingly Attracted to Bitcoin
Many Egyptians are drawn to bitcoin amid the coronavirus pandemic, economic crisis, and resulting unemployment, Al-Monitor news outlet reported last week.
A bitcoin mining and trading expert, Muhammad Abd el-Baseer, is a leading member of the Bitcoin Egypt Community, one of Egypt’s professional online communities for people interested in cryptocurrency. He told the publication that there has been a spike in the number of community members, indicating high demand for bitcoin mining and trading in Egypt. Noting that more than 16,000 Egyptians have joined the community, he estimated:
The number of miners in Egypt should be greater, since each one of the 16,000 [members] may train and guide many of their friends, family and neighborhood zones.
He explained that “Online work from home, reduced working hours and curfews have been imposed since March as precautionary measures against the outbreak of Covid-19 in Egypt,” the publication conveyed. “The huge business shift to online work from home along with reduced working hours and curfews are encouraging thousands of Egyptians to invest their spare time in unusual online businesses like mining and trading of cryptocurrencies, most notably the bitcoin.”
Another bitcoin miner, who is a member of several bitcoin and cryptocurrency communities like Bitcoin Egypt, told the publication that he chose this business after losing his job at a contracting company that downsized, following the coronavirus outbreak. He invested what he saved over the past years into the business. More than half a million Egyptians have lost their jobs as unemployment in the country rose from 7.7% in the first quarter to 9.6% in the second quarter, the news outlet added.
According to the 2020 Geography of Cryptocurrency report compiled by blockchain analytics firm Chainalysis, Egypt ranks 64th out of 154 countries on the firm’s global cryptocurrency adoption index. The firm ranks Ukraine first, followed by Russia, Venezuela, and China. The report further shows that most of the bitcoin trading in Egypt takes place on Okex, Coinbase, Binance, Huobi, Bitfinex, FTX, and Bitmex exchanges. Only small amounts of BTC are traded on peer-to-peer (P2P) platforms in Egypt. Localbitcoins, for example, saw 10 BTC traded in the week ending Sept. 26, but the trading volume on the platform has also been steadily growing.
Egyptian economist and financial adviser Wael al-Nahhas told the publication:
Unemployment and recession resulting from the spread of the coronavirus and the precautionary measures taken are the main reasons behind the youths’ inclination toward bitcoin trading and mining.
The miner noted that bitcoin mining and trading are attracting thousands of Egyptians since they do not require much startup capital and millions of Egyptians’ savings are dwindling amid the recession.
“Many young Egyptians started investing in small amounts despite the increase in the value of the bitcoin. They started mining satoshi, which is 100 millionth of a bitcoin, and on a daily basis they are making profits of 4% to 5% from the difference between buying rates during the timing of demand decline and selling rates at the time of peak demand, besides some quarterly or yearly profits from unexpected hikes in bitcoin rates,” he was quoted as saying.
Mohamed Mohsen, an Egyptian bitcoin miner and lawyer, told the news outlet that Egyptian laws do not criminalize the dealing in cryptocurrencies. He added that people who have been arrested by the authorities misused cryptocurrencies in crimes, such as fraud and financing of terrorism.
Ahmed Shuair, an economics lecturer at Cairo University, believes that the Central Bank of Egypt will soon legalize cryptocurrencies. He explained that the central bank was preparing to issue a law to that effect in January, but the coronavirus pandemic changed the bank’s priorities.
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