South Africa is full of market potential as a player in the cryptocurrency space. With the innovation of digital assets, more and more South Africans want to benefit from peer-to-peer exchanges and transactions and diversify their investments. However, with the surge of different tokens in the market, how do clients weed out the best one that suits their needs?
If you’re on the hunt for cryptocurrencies, look no further because here’s a guide on profitable cryptocurrencies. You can also learn how to maximise them for crypto profits at Crypto in Afrika when you read below!
What was the most profitable crypto in the past in South Africa?
In the previous years, Bitcoin continued to be the most profitable crypto in South Africa and remains the top cryptocurrency used in the region. According to a recent article by Bitcoin.com, an estimated 7.6 million South Africans use crypto. The growth of trade in exchanges led to more South African investors trading, resulting in significant returns in the market.
Is cryptocurrency profitable?
Crypto has the potential to be a profitable investment since it yields high returns when you sell at the right moment. However, since the market is relatively new and the prices always change, investors need a good investment strategy to earn big or risk losing profits.
Although risky, cryptocurrency is a good and diverse asset to have. You can expect short or long-term returns if you navigate the crypto space with the right approach.
What is the most profitable cryptocurrency?
Find out the most profitable currency in South Africa this 2023 below:
- Bitcoin (BTC)
Bitcoin remains the top token choice in South Africa based on the volume of trade, and for a good reason. Despite its low prices in the previous year, many still buy Bitcoin because it’s during price dips that it’s more affordable to buy. And based on Bitcoin’s price history, it’s normal to drop in price for a certain period before increasing again.
According to experts, the world’s digital gold will experience a resurgence and growth in the crypto market in 2023 compared to its performance in 2022. This gives long-term investors a positive outlook for the trading year to come.
Usually, BTC is a good investment option for traders with a high-risk appetite and those comfortable with losing profits before earning it back. But regardless of which type of investor, it’s essential to know what Bitcoin is and which Bitcoin wallets you can trust to keep it secure.
- Ethereum (ETH)
Trailing behind Bitcoin is Ethereum, another major cryptocurrency in South Africa. This coin’s capacity isn’t limited to buying and selling. It can also be used to develop decentralised applications through smart contracts.
Last year, the Ethereum network switched to a proof-of-stake model, becoming more functional and efficient. This makes it more attractive to investors and the best time to invest in Ethereum. Thus, many are optimistic that Ethereum will grow in 2023 and remain one of the top cryptocurrencies.
- Binance Coin (BNB)
Another token to watch out for is the Binance Coin (BNB). According to recent data from Forbes, BNB tokens can now be used for payment processing and trading, an upgrade from its localised function in the Binance exchange platform.
Value for this coin may still fluctuate throughout the year because of the bear market, which means investors mainly buy instead of sell. However, it’s projected to still be profitable after the market settles down later in the year.
This crypto is best suited for long-term investments and is for investors looking to diversify their digital assets from other giants in the market, like Bitcoin and Ethereum. You can also use this to profit during a crypto bear market in South Africa.
- Cardano (ADA)
Also known as ADA, Cardano is another top-performing cryptocurrency worth looking at. This token is known for adopting a proof-of-stake consensus, eliminating massive energy consumption. Additionally, it can also facilitate smart contracts and decentralised applications.
- Ripple (XRP)
Ripple coin was released in 2012 and stayed as a top 10 digital asset in many crypto lists because of its fast payments, low costs and minimal energy expenditure.
Ripple stands out because it offers financial product solutions such as Xcurrent, Xvia and XRapid. It also has high liquidity, making it ideal for users who want to do cross-border transactions.
How to profit from cryptocurrency in South Africa
Profiting from crypto means learning how to trade crypto in Africa and knowing your risk management threshold. Fortunately, there are techniques and strategies from experienced investors you can try, based on your preference. Check them out below:
- Buy and hold
Buy and hold, also known as the HODL strategy, was popularised in 2013 when the market was especially volatile. This strategy is where investors ‘buy’ when crypto is low in price and keep them despite market volatility. Usually, this strategy is good for investors who have a diverse portfolio and want long-term gains.
- Day trading
Time plays an essential factor in crypto trading because the market is more volatile in the day when more investors are active as opposed to night and early mornings. Day trading makes the most of this high volatility.
Day trading strategy involves buying and selling assets during daily price hikes to make profits. It relies on small bursts of price changes compared to big ones over long periods.
- Mining
Mining is one of the most popular strategies you can do to gain cryptocurrencies. Crypto mining is a system where nodes verify blockchain payments by solving cryptographic puzzles. After verifying it, miners who operate these nodes are rewarded with crypto.
Because of the intense computational needs, this strategy is recommended for those that can afford high-spec hardware like graphic processing units (GPUs) and multi-core processors.
- Staking
Staking is a popular strategy for those who prefer a passive approach to gain profit. This strategy works by ensuring the blockchain and investors mutually benefit each other. The users stake their tokens and participate in keeping the blockchain secure and efficient, while the blockchain rewards them with staking rewards like crypto.
There’s less need for energy consumption in staking since your likelihood of getting selected to process transactions depends on the number of tokens you staked. You won’t have to solve complex computational problems and use tons of electricity like in crypto mining just to be considered for the block reward.
- Arbitrage
Arbitrage is the strategy where investors buy crypto from one exchange and then sell it on a different platform at a higher price for profit.
To further maximise this strategy, you should look for the best crypto trading platforms where you can get the best prices for your trades. You can also use unique software to scan for price changes across exchanges like peer-to-peer marketplaces, look for fluctuating crypto and use a combination of spatial arbitrage and triangular arbitrage strategies.
How to choose a profitable cryptocurrency in South Africa
When choosing a profitable cryptocurrency, it’s important to consider market capitalisation and adoption rates to maximise profits. Here are some of the things you need to know:
- Market capitalisation
Market capitalisation is an important factor determining a token’s popularity by multiplying the current price by the circulating supply. The bigger the market cap, the more popular and liquid a coin is. You won’t have trouble finding traders willing to buy and sell these coins.
Usually, large-cap cryptos are the safest and can reliably earn you small crypto profits, while small-cap cryptos are risky but with higher returns.
Before investing in a token, opt for tokens with big market caps, such as Bitcoin, Ethereum and Ripple, for significant gains. But for day trading, choose more volatile small-cap cryptos to trade.
- Adoption
Another good indicator of strong crypto profitability for investors is when the currency has mass adoption. Widespread crypto adoption means it’s often utilised, translating to a good balance of supply and demand. In addition, when more people use crypto, its demand grows, building its value and making it more beneficial to those who already have it.
- Technology
A good indication of profitable crypto is how advanced and well-thought-out the technology is. If it promises a practical solution to problems in varied industries, it has a good chance of being adopted and going big.
A common example of this is Ethereum. It’s more than just a cryptocurrency—it is also a platform where developers can create applications for their crypto needs. This enables other technologies to flourish, which makes it foundational to the industry’s growth.
- Liquidity
If you place importance in being able to switch your crypto, you’ll want to make sure the crypto you choose is ‘liquid’. In the crypto space, liquid refers to how easily you can convert or trade your crypto for another currency, whether digital or fiat. When a token is liquid, the currency is ‘healthy’ and its supply and demand are balanced.
- Regulatory environment
Since crypto is largely anonymous, it can be used for illegal acts. To prevent this, a lot of regulation is needed while also not jeopardising the anonymity of users. Checking to see if the crypto is licensed, registered and authorised is a good way to lessen the risk in your investments.
Join the crypto craze and invest in the most profitable coins today!
Learning about crypto profitability is only part of knowing the right crypto for you. Before joining the market, it’s important to learn about strategies and practise with an open mind to help you minimise losses. Then you can be a mindful investor and earn sustainable cryptocurrency profits.
FAQs about profitable crypto
Which cryptocurrency is best in South Africa?
Bitcoin (BTC) is the best crypto in South Africa, followed by Ethereum (ETH) and Binance Coin (BNB).
Which cryptocurrency gives the highest profit?
Bitcoin has the highest average potential return, but all cryptocurrencies can give you the highest profit when the right strategies are used.
Which crypto is best for the long term?
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are great options as long-term crypto investments. The first has the highest price of all cryptocurrencies, the second follows with its innovative technology, and the last is used by financial institutions, translating to high adoption rates.
