{"id":18584,"date":"2022-11-29T09:03:46","date_gmt":"2022-11-29T09:03:46","guid":{"rendered":"https:\/\/barazalab.com\/?p=18584"},"modified":"2023-11-27T12:39:22","modified_gmt":"2023-11-27T12:39:22","slug":"cryptos-crash","status":"publish","type":"post","link":"https:\/\/tuwele.com\/baraza_update\/cryptos-crash\/","title":{"rendered":"Crypto’s Crash"},"content":{"rendered":"

From the Curator\u2019s Desk<\/b><\/p>\n

Greetings friends:<\/span><\/p>\n

I\u2019ve seen it called the fastest wipeout of wealth in history \u2013 Sam Bankman-Fried, founder of crypto exchange FTX, was once worth $26 billion; that\u2019s now down to nothing after a matter of days. Yes, zero. Much of that wealth was fuzzy to begin with \u2013 <\/span>one article called<\/span><\/a> his digital assets \u201c<\/span> illiquid, of speculative value, and just plain weird\u201d \u2013 but that sudden crash actually came after one of \u201cthe fastest accumulations of self-made wealth in history\u201d. Quick money into your pocket is quick to leave, it seems.<\/span><\/p>\n

All that virtually created wealth is in the dust,\u00a0 but with some very real world effects. Bankman-Fried had chosen to headquarter his company in The Bahamas; the Caribbean island nation had welcomed him with open arms, hoping to diversify its economy with the crypto boom at the heart of its economic strategy.\u00a0<\/span><\/p>\n

\u201cCrypto was going to be our way out,\u201d said Stefen Deleveaux of the Caribbean Blockchain Alliance, quoted <\/span>in this article in the FT<\/span><\/a>. Now, that strategy is defunct, which reminds me of <\/span>the failed promise of Africa\u2019s \u2018smart cities<\/span><\/a>\u2019, starting with Kenya\u2019s still sleepy Konza. It should get African countries rethinking too \u2013 cryptocurrencies have become popular in African and other developing countries, with significant proportions of the population in Kenya <\/span>(8.5%)<\/span><\/a>, South Africa (7.1%) and Nigeria\u2019s (6.3%) using these digital currencies. In June, the Central African Republic even <\/span>adopted bitcoin<\/span><\/a> as a legal tender; and one man in Kenya became <\/span>momentarily famous<\/span><\/a> some years ago for paying his wife-to-be\u2019s <\/span>mahari<\/span><\/i> with bitcoin.<\/span><\/p>\n

The crash is reflective of Bankman-Fried\u2019s extraordinary hubris but also of cryptocurrencies downward trend in general \u2013 bitcoin is down 66% in US dollar terms this year. Still, crypto may continue to be important for African investors and users, who typically buy, sell and hold crypto not for speculation, but to hedge against inflation, as a clever way to access scarce dollars or to move currencies across borders, in a continent where cross-border transactions are some of the most expensive in the world.<\/span><\/p>\n

Africa, then, might become crypto\u2019s saviour. What we can be sure of is there\u2019s a Netflix tell-all documentary in the works.<\/span><\/p>\n

In the meantime, here\u2019s:<\/span><\/p>\n