- How to buy cryptocurrency in South Africa
- Crypto in South Africa
- Buying crypto in South Africa in 4 simple steps
- Where to buy cryptocurrency in South Africa
- What are the best ways to buy crypto?
- Why You Should Buy cryptocurrency in South Africa
- What is the cheapest way to buy Crypto?
- How to find the best cryptocurrency exchange in South Africa
- Using FSCA-registered exchanges
- Things to consider before buying crypto
- After you've bought Crypto
- Bottom line
How To Buy Crypto in South Africa: Choosing Crypto Exchanges And More
How to buy cryptocurrency in South Africa
Before we get into how to buy cryptocurrency in South Africa, let's first get a clear understanding of what cryptocurrency actually is. It's a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
Many cryptocurrencies are decentralised networks based on blockchain technology — a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
Before you buy any crypto currency have a clear understanding of how it works and how you can go about investing.
Crypto in South Africa
South Africa's financial watchdog has classified cryptocurrency assets as financial products in a notice in the government gazette in July 2022, enabling them to be regulated.
Is it safe to invest in crypto?
Understanding whether crypto is a safe investment depends on how you define financial security.
Cryptocurrency is a highly speculative investment, the risk/reward profile of investing in it differs from investing in most stocks or bonds.
It's important to understand how to invest in cryptocurrency in South Africa and how to invest in Bitcoin in South Africa, the following is important to note before investing:
Price volatility: How much and how quickly prices move over a given span of time.
Perceived value: A customer's own perception of a product or service's merit or desirability to them, especially in comparison to a competitor's product.
Exchange vulnerabilities: Crypto platforms expose you to risks including scams, hacks, theft, and fiscal mismanagement.
Technical learning curve: Understanding the technology behind cryptocurrency is essential before you start trading. Do as much research as possible to understand blockchains and other forms of decentralised finance.
Wallet vulnerabilities: Crypto wallet security vulnerabilities can manifest into real user pain and loss. Make sure you research the types of wallets that you use properly.
Transactions can't be reversed: Cryptocurrency transactions on the Bitcoin and Ethereum networks are, by design, irreversible. This means you cannot reverse or cancel a completed transaction for any reason.
How is crypto taxed?
Profits from cryptocurrency investing and trading activity are subject to taxation. However, you may be taxed differently depending on the specific nature of your activity. Generally, if you're considered an investor, your profits will be subject to capital gains tax. If you're considered a trader, your profits will be subject to income tax.
In addition, there are specific transactions — such as earning mining and staking income — that will likely be subject to income tax regardless of whether you're a trader or investor.
Differences between crypto and ZAR
CRYPTO
1. Cryptocurrency is a digital currency that acts as a medium of exchange. It does not require any middleman such as a bank or a payment processor and it operates on a binary data system. ZAR
2. Thousands of different cryptocurrencies are in circulation all over the world. It is now a popular instrument for investment.
3. Cryptocurrencies do not have any physical form. It is a digital medium of exchange with encrypted codes. It is intangible.
ZAR
1. Is mostly physical currency, but it can be digital too. It requires a bank as an intermediary.
2. The presence of intermediaries and other factors make ZAR safer.
3. It is produced and monitored by central authorities. This form of currency is more usable for transaction and exchange purposes compared to cryptocurrency.
What will I need to buy crypto in SA?
- Valid email address
- ID and photo
- Cellphone
Buying crypto in South Africa in 4 simple steps
The following steps will take you through how to buy crypto in South Africa.
1. Compare crypto exchanges
Comparing exchanges in a table helps you find a platform with the features you want like, low fees, ease of use or 24-hour customer support.
| CRYPTOCURRENCY | TYPE OF CRYPTO | PROS & CONS |
| Bitcoin | Token | ● Secure and quick transactions.● Offers transparency every transaction is saved in the blockchain.● High level of safety and security.● Decentralised, users are free to use their Bitcoin as they see fit● Anonymity, there's no need to share your personal or financial information.● Huge impact on the environment due to Proof of Work (PoW) protocol.● Aims to decrease the purchasing power of money. |
| Ethereum | Token | ● Decentralised, effectively distributes knowledge and trust among network members, removing the need for a central body to run the system.● Platform for the crypto economy.● Gas fees, a transaction fee that a user pays when sending funds across the network.● Rapid development uses advanced technology.● Volatile, resulting in significant gains as well as significant losses. Any item that has been registered in a digital format can be tokenised. |
| Tether | Stablecoin | ● Offers more liquidity than any other digital asset● Shows low volatility● Firm undergoes regular audits and each transaction can be viewed on the blockchain.● Should all the investors exchange the currency for money, the firm may not have enough funds.● Parent company was previously fined for not following the rules and regulations. |
| USD Coin | Stablecoin | ● Enables people to buy and sell other cryptocurrencies without having to move fiat currency in and out of exchanges.● Lots of liquidity.● Can be transferred 24/7 and is faster to send.● No potential for price appreciation● Transaction costs are low.● Fees for withdrawing USDC from exchanges can also be high. |
2. Create an account
To create an account on an exchange, you'll need to verify your email address and identity. Have some photo ID and your phone ready.
3. Make a deposit
Once verified, you can deposit ZAR using the payment method that best suits you – cryptocurrency, bank and card payments are widely accepted.
4. Buy Crypto
You can now exchange your funds for crypto. On beginner-friendly exchanges, this is as simple as entering the ZAR or crypto amount you want to purchase and clicking "buy". If you like, you can then withdraw your cryptocurrency to a personal wallet.
Where to buy cryptocurrency in South Africa
Buying cryptocurrency can be intimidating at first, first thing you'll need to do is look for platforms that accept South African Rand (ZAR), like Binance or VALR these are better suitable for South African cryptocurrency exchange.
Custodial exchanges
Refers to online platforms that allow users to buy and sell cryptocurrencies.
Non-custodial exchanges
Online platforms that allow users to buy and sell cryptocurrencies without holding their assets or private keys.
What are the best ways to buy crypto?
When choosing to buy cryptocurrency, it's important to look at different ways you can make your purchase.
Buy crypto with a bank account
Most exchanges allow bank transfers from South Africa.
It's usually less complicated to buy crypto via the bank instead of using exchanges.
Buy crypto with a debit card
Every transaction depends on the platform:
- Read the fine print on the exchanges you use.
- Some may allow you to spend as much as you want from your debit card, whilst others only allow you to make specific transactions.
Buy crypto with a credit card
Purchasing cryptocurrency with a credit card is possible but can be a dangerous financial undertaking. Cardholders can expect fees from both sides of a transaction involving cryptocurrencies and credit cards, plus face the risk of losing money quickly because of volatile currency values and high interest rates.
Buy crypto with cash
You might ask yourself how to buy Bitcoin in South Africa? It's really not as daunting as many think.
There are two ways you can do this:
- One way to Bitcoin with cash is peer-to-peer, meaning you can find someone locally to buy from in-person. This requires a bit more work than most people would enjoy. The risk of fraud is high, so be sure to find a reputable platform that can help facilitate the process.
- The other more convenient and less invasive way is to buy Bitcoin with cash at a Bitcoin ATM. You can find these in South Africa's major cities like Pretoria, Johannesburg, Cape Town, Durban, Port Elizabeth, and Stellenbosch. You are required to bring your ID and pass the Know Your Customer (KYC) check to buy Bitcoin South Africa.
Buy crypto with another crypto
Some exchanges only allow you to buy crypto using another crypto, meaning you'd have to find another exchange to buy the tokens your preferred exchange accepts before you could begin trading crypto on that platform.
Why You Should Buy cryptocurrency in South Africa
Cryptocurrency transactions do not incur banking fees
The great advantage about buying crypto in South Africa or Bitcoin in South Africa is that transactions do not incur any bank fees.
Low transaction fees for international cryptocurrency payments
Crypto payments have very low transaction fees for international payments versus many other global companies.
Mobile-friendly and secure transactions
Smartphone penetration in South Africa is at 90% meaning that almost everyone in the country has a cellphone. Cryptocurrency is mobile-friendly and secure, giving you the opportunity to transact on your phone any time, anywhere.
International currency
Inflation has caused many currencies to urge their value to decline with time. At the time of its launch, almost every cryptocurrency is released with a capped amount. Because the demand increases, its value will increase which might stay inline with the market and, in the long run, prevent inflation. Today, the most popular cryptocurrencies are accepted as a means of payment around the globe.
Transaction time
This all depends on the exchange that you use. Some may take hours, others have a faster turnaround time. However, because payment using crypto generally uses large sums, it may be faster because there are no middlemen like banks, etc.
What is the cheapest way to buy Crypto?
On some platforms you could spend as little as R10. Investments don't have to be huge, in order for them to be effective.
There are two popular ways to buy crypto, which include instant buy and spot market.
Instant buy
- Takes less time to purchase than spot market, however, it does cost more.
- You'll see instant buy via the "buy now" section on the platform of your choice.
- It's usually easy to navigate; you select the amount you want to spend and the crypto you're interested in purchasing.
- This option is mostly available to credit and debit card purchases.
- Note that you may have to pay a market rate in exchange for the convenience you enjoy with instant buy.
Spot market
- Spot trading is a simple concept in which traders buy crypto assets and wait for them to rise in value.
- Spot trading is one of the most basic ways to trade or invest in crypto. Many new investors and traders start their crypto journey by interacting with the spot market.
- In spot trading, you buy the asset with your own money. This means you can only buy as much as you can afford, and nothing more.
- There are different orders you can make on a spot market.
- Market order: An order placed by a trader to buy or sell an asset like Bitcoin immediately, at whatever its current price is.
- Limit order: An order to buy or sell a security at a specific price or better.
How to find the best cryptocurrency exchange in South Africa
There are lot of options to choose from when buying crypto, before choosing one consider the following.
Where it's registered?
It's advisable to choose an exchange that is registered with the Financial Sector Conduct Authority (FSCA) which is the cryptocurrency regulator in South Africa. This is beneficial because the likelihood of them using ZAR as a currency is high and it also means you can avoid foreign exchange fees.
Security
Be mindful of the security features on your chosen platform like 2-factor authentication and private encryption keys to your crypto wallet.
Fees
Go through the fine print with a fine tooth comb, make sure that you know what costs are involved so that nothing catches you by surprise. Different platforms have different fee structures.
Transaction limits
Look at the minimum and the maximum limits on your crypto purchase based on the platform. Are there any rules on withdrawals? Is there a waiting period on transactions?
Other platform features
What else does the platform offer? How can you use different features to your advantage? From intuitive user interface to API, learn more about the features offered for a better experience.
Customer support
Is the support team based in South Africa? Do they have specific working hours? It is essential for any cryptocurrency exchange platform to offer around-the-clock customer support to different users. Many users are beginners, hence it becomes important for them to have dedicated assistance.
Insurance fund
Provides a safety net to cover unexpected losses that exceed the initial margin. This protective measure helps traders to mitigate risks and provides an additional layer of security against incurring a negative balance when engaging in high-risk derivative trading. Research to see if it's offered and how it impacts you.
Reputation
In every industry, reputation is everything, and the cryptocurrency space is no different. Information such as who started the company? How long has it been in existence? Have they made headlines recently? This information will help you choose a platform that best suits you.
Range of cryptocurrency
Investigate whether you can purchase more than one cryptocurrency on the platform.
Read reviews
Look at other people's experiences on the platform, this will tell you a lot about the platform itself.
Using FSCA-registered exchanges
The FSCA was established to be a dedicated market conduct regulator in South Africa's Twin Peaks regulatory model implemented via the Financial Sector Regulation Act. When individuals choose a platform to exchange on, they can either choose a local one or an international exchange. There are pros and cons of choosing a locally registered crypto exchange, let’s look at them further.
| Pros | Cons |
| Locally based exchanges must comply with FSCA Anti-money Laundering (AML) and Counter-terrorism Financing (CTF) reporting obligations. | International platforms may provide better liquidity. |
| You can buy crypto using ZAR, the South African currency. | Trading anonymously is not possible because you have to provide your personal details and proof of ID. |
| Exchanges in South Africa typically support local payment methods, such as Payfast, Yoco, and Ozow. | Certain features are not available on South African platforms. Such as high leverage margin trading, DeFi features and some altcoins. |
| When you need help, you can easily access it local customer support is available. | ZAR-to-crypto prices are often slightly higher than USD-to-crypto prices, meaning you sometimes pay a premium for buying directly with South African Rand. |
Exchange is subject to local legislation.
Things to consider before buying crypto
Looking at what's currently happening in the industry will help you make a more informed decision when it comes to crypto.
Recent Bitcoin developments
April 11, 2023
Bitcoin surges above $30,000, with bigger gains on the horizon
● Following the emergence of the rounding bottom pattern on the daily chart, Bitcoin managed to slice above the psychological resistance level at $30,000 on April 11. The Relative Strength Index (RSI) has shown a reading of 70, suggesting that the leading cryptocurrency is still not in overbought territory with more upside potential.
● Should the buyers continue to keep the bullish momentum going, the next level of resistance will appear at the 127.2% Fibonacci extension level at $34,490. In order for the chart pattern's optimistic target of $40,000 to be achieved, BTC will need to sustain trading above the neckline at $28,486.
● If the buying pressure falters, Bitcoin may be able to find support at the 78.6% Fibonacci retracement level at $27,205.
Where could Bitcoin's price be heading?
There are several views and predictions on Bitcoin, some are bullish, and some are bearish. Only time will tell where Bitcoin will head next. Bitcoin, which is known for its resilient nature, carries a huge capacity for comebacks.
The market is expected to see a low price of $30,225, with a potential move to the $51,438 level in 2024. In 2025, the low is expected to be $39,512, with a high of $62,723. The average price in 2024 is roughly $40,000. The average price in 2025 is expected to be near $49,000.
After you've bought Crypto
You've finally bought the crypto, you now have two options: you can keep it on the exchange or move it to a personal wallet.
Keeping your cryptocurrency on an exchange
| Pros | Cons |
| User-friendly Centralised exchanges offer beginner investors a familiar, friendly way of trading and investing in cryptocurrencies. As opposed to using crypto wallets and peer-to-peer transactions, which can be complex, users of centralised exchanges can log into their accounts, view their account balances, and make transactions through applications and websites. | Hacking risk Centralised exchanges are operated by companies that are responsible for the holdings of their customers. Large exchanges usually hold billions of dollars' worth of Bitcoin, making them a target for hackers and theft. |
| Reliable Centralised exchanges offer an extra layer of security and reliability when it comes to transactions and trading. By facilitating the transaction through a developed, centralised platform, centralised exchanges offer higher levels of comfort. | Transaction fees Unlike peer-to-peer transactions, centralised exchanges often charge high transaction fees for their services and convenience, which can be especially high when trading in large amounts. |
| Leverage One of the other benefits of certain CEXs is the option to leverage your investments using borrowed money from the exchange, called margin trading. It allows investors to reap higher returns, but losses can also be amplified. | Custody of digital assets and risk of fraud Lastly and most importantly, most CEXs will hold your digital asset as a custodian in their own digital wallet rather than allow you to store your private keys on your own digital wallet. While more convenient when you want to trade, there are drawbacks, namely the risk of the centralised cryptocurrency exchange failing and fraud. |
Moving your cryptocurrency to a non-custodial wallet
| Pros | Cons |
| Security The entire information remains with users. This reduces the risk of data being stolen, unless the user shares the details with someone, or their device gets stolen. | The learning curve Learning how to use a crypto wallet takes lots of time and effort. You have to spend a significant amount of time learning how to use a crypto wallet before transferring any of your funds. |
| Custodian of private key All the blockchain custodian services reside with the user. | With great power comes great responsibility Having direct control over your money can be liberating but it also comes with a great deal of responsibility. If you lose the private key, the only way to get back access to your wallet is through seed phrase. |
| Transaction type The transaction is reflected on the chain in real-time, no delays. | Inheritance Lots for people don't think about what happens in the event that they pass on or are disabled. It's challenging to pass access to the crypto wallet to a member of your family. |
| Utility If you're planning on transacting daily, then using a wallet instead of an exchange will be more convenient. | |
| Offline accessibility Accessing your funding and corresponding details can be done offline. There's no need to login and make a request to centralised authority. |
Bottom line
If you want to buy crypto in South Africa, thoroughly research, compare brokers and exchanges that are available in the country. Have a look at where they are registered, security, fees, transaction limits, insurance, reputation, and reviews. Consider an exchange that's registered with FSCA, this way you know everything is above board.
Owning your own crypto comes with its own risks, be aware of them. Consider investing in crypto as part of a wider strategy, speak to financial experts and have a better understanding of what you're getting yourself into.
Your short- and long-term goals are important to craft once you've bought your crypto. This will help you decide whether to keep it on an exchange or move it to your own wallet.
Maboko holds a BTech in Metallurgical Engineering and has been in the financial market for over 6 years. He has experience in market analysis and systematic trading strategies.
If this is your first-time buying Bitcoin, you'll need to look for a platform that accepts South African Rand (ZAR). Once you're feeling comfortable, you can buy Bitcoin on the spot market, the costs are usually less. You can also look at other platforms that are mostly beginner friendly.
Some experts recommend investing no more than 1–5% of your net worth. When looking at how much of your portfolio to invest in crypto. Limiting your overall exposure to crypto is crucial and it's important to never invest more than you could afford to lose.
The safety way to buy crypto is through reputable and recognised exchanges or brokers that comply with the South African laws and regulations.
Make sure they are registered with the FSCA KYC, use two-factor authentication (2FA), and has an insurance fund.
There are limited ways you can buy crypto without an ID. However, it's safer to buy crypto on platforms that are registered with FSCA. You'll be unable to create an account on a FSCA platform without the proper documentation including your ID.
1) Select the wallet you want to use. It can even be the one you consider as the best Bitcoin wallet South Africa.
2) Software wallets take the form of an app which is downloaded for free to your phone or desktop.
3) Centralised exchanges (CEXS) have traditionally been a popular place for many newcomers to buy their first Bitcoin because they simplify the buying process. It's like opening a trading account.
4) Since software wallets connect to the Internet, there's a very small risk of hacking. Therefore, it is generally recommended to not store large amounts of Bitcoin in your software wallet. That being said: If you follow password management best practices, it's safe to store Bitcoin in a software wallet.
5) While there have been a few isolated cases of software wallets being hacked, by far the greater risk is that you lose your "private key", which is like the password to your wallet. Therefore, it's critical to back up your wallet and store the password somewhere safe.
Read also
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