A growing number of Egyptians are said to be turning to bitcoin amid rising unemployment and economic crisis. An Egyptian bitcoin community sees a huge spike in the number of members interested in mining and trading bitcoin.
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.
Bitcoin mining and trading expert Muhammad Abd el-Baseer is a prominent member of the Bitcoin Egypt community, one of Egypt’s professional online communities for those interested in cryptocurrency. He told the publication that there had been an increase in the number of community members, indicating a 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 is expected to be greater, as each of the 16,000 [members] can train and guide many of their friends, family and neighborhoods.
He explained that “online work from home, reduced working hours and curfews have been imposed since March as precautionary measures against the Covid-19 epidemic in Egypt,” the publication said. “The huge business shift towards working from home online, along with reduced working hours and curfews, are encouraging thousands of Egyptians to invest their free time in unusual online ventures like mining and trading in cryptocurrencies, including bitcoin.
Another bitcoin miner, who is a member of several bitcoin and cryptocurrency communities like Bitcoin Egypt, told the publication he chose the company after losing his job at a contracting company that had downsized to the aftermath of the coronavirus epidemic. He invested what he saved over the past few years into the business. More than half a million Egyptians lost their jobs as unemployment in the country fell from 7.7% in the first quarter to 9.6% in the second quarter, the newspaper added.
According to the 2020 Cryptocurrency Geography Report compiled by blockchain analysis firm Chainalysis, Egypt ranks 64th on the company’s Global Cryptocurrency Adoption Index, which ranks Ukraine in first place, followed by Russia, Venezuela and China. Most bitcoin trading in Egypt takes place on the Okex, Coinbase, Binance, Huobi, Bitfinex, FTX, and Bitmex exchanges. Small amounts of BTC are traded on peer-to-peer (P2P) platforms. Localbitcoins, for example, saw only 10 BTC traded in the week ending September 26, but the volume of BTC transactions on the platform has also grown steadily.
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 for the inclination of young people to trade and mine Bitcoin.
The miner noted that bitcoin mining and trading attracts thousands of Egyptians because they don’t require a lot of start-up capital and the savings of millions of Egyptians are dwindling amid the recession.
“Many young Egyptians have started investing in small amounts despite the increase in the value of bitcoin. They have started mining satoshi, which is the 100 millionth of a bitcoin, and are making daily profits of 4% to 5% of the difference between the buy rates at the time of demand decline and the rates of selling at the time of peak demand, in addition to some quarterly or annual profit from unexpected bitcoin rate hikes, ”he said.
Mohamed Mohsen, an Egyptian miner and Bitcoin lawyer, told the outlet that Egyptian laws do not criminalize the trafficking of cryptocurrencies. He added that those arrested by authorities had abused cryptocurrencies in crimes, such as fraud and terrorist financing.
Ahmed Shuair, professor of economics 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 this effect in January, but the coronavirus pandemic has changed the bank’s priorities.
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