Most Exciting Regions in Bitcoin Investing

Bitcoin is a cryptocurrency with the potential to break down international barriers by providing a single, decentralized currency. Due to its borderless nature, there are opportunities for bitcoin investing all over the world. While the majority of bitcoin investment has been raised by American companies, CrunchBase calculates that over 40% of total venture investments in the past three years have been directed to startup companies outside of the US.
Jalak Jobanputra, a founding partner of Future Perfect Ventures, explains that one of the most exciting dimensions of bitcoin investing is its “potential in emerging markets, when there are so many underbanked and the financial infrastructure is not as developed.” Bitcoin investing can take advantage of the mobile networks already in place, creating efficient financial systems which function independently of conventional bank infrastructure. Therefore, some of the most exciting bitcoin investing is occurring in developing economies and emerging markets, with developments occurring in countries like Kenya and Mexico, with large remittances markets.

Ties to remittances markets

One of the major benefits of bitcoin is its ease of transferability. Unlike conventional currencies, which can be costly and timely to transfer across counties, bitcoin can be immediately shared from one person to another, with no expensive conversion rates and bank costs. This is of particular value to regions where remittances form a significant part of the economy. With large remittances markets stemming from an international diaspora, the cryptocurrency is taking hold across the regions in Africa and Latin America.
The World Bank reports that Africans pay more than any other migrant group to transfer money back home, spending around $24 for every $200 sent. With the Central Bank of Kenya reporting $1.42 billion in remittances flowing into Kenya in 2014, and this number increasing every year, the cost of international money transfers is a key issue. In April 2015 alone, there were $145 million in remittance inflows to Kenya, a 9.8% increase from the same month last year.
Mexico also exhibits a large remittances market. According to a recent World Bank report, it brings in vastly more remittances than any other Latin American country. Representing a significant percentage of foreign income, Mexico received $25 billion in remittances in 2014.

Start-up cultures encourage bitcoin investing

The adoption of bitcoin could totally reduce the cost traditionally associated with international money transfers, and start-up companies are beginning to take notice of this potential. Kenyan companies like BitPesa and Kipochi are transforming this region’s bitcoin investing landscape, using the prevalence of mobile devices to make currency transfers simpler. The lobby group African Digital Currency Association (ADCA) is pushing for the establishment of Kenya’s first bitcoin exchange, which would mark this region as a growing presence in bitcoin investing.
Meanwhile, in Mexico the bitcoin exchange Bitso recently acquired a seed-funding round from angel investors and the Digital Currency Group. The exchange plans to collaborate with the Mexican government in order to provide a cheaper, more efficient method of transferring money, premised upon the region’s existing mobile phone network. In a country where many people are underbanked and have limited access to credit cards, this may potentially transform the way the country thinks about money.
High remittance economies coupled with robust start-up cultures seem to be the recipe for creating exciting opportunities for bitcoin investing. These developing countries and emerging markets are modelling ways in which bitcoin could revolutionize the way we think about money on an international scale.
 

Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.