The Vodacom Foundation has launched Bright Sky SA, a free app aimed at strengthening the fight against gender-based violence and domestic abuse in South…
A South African founded and globally recognised cryptocurrency exchange, Luno has launched a savings wallet feature that will allow users to earn up to 4% interest per annum on Bitcoin holdings.
Users can earn up to 4% interest per annum on their bitcoin holdings via the newly launched Luno savings wallet
The new feature will allow Luno users with Bitcoin to “earn passive income” on their balance. The savings wallet allows this earned interest with no penalties and little effort.
Marcus Swanepoel, CEO, and co-founder of Luno explains that Bitcoin investments offer more stability in the current economic climate and the launch of the new savings wallet feature falls in line with this.
“In a time of economic uncertainty, the Bitcoin savings wallet is an alternative for anyone looking to get meaningful savings on their money. Almost 95% of our customers have said they want to earn interest on their Bitcoin, and because of the nature of Bitcoin, we are able to offer a much higher interest rate than traditional savings accounts in certain regions (Europe for example) and comparable to flexible interest offerings in emerging markets such as South Africa. As traditional investments have shown vulnerability at a time of crisis during 2020, there has never been a better time to benefit from a currency that does not rely on a healthy economy to determine its value.”
Benefits of savings wallet
The Luno savings wallet has the following benefits:
1.Up to 4% interest per annum on your Bitcoin balance
There are no fixed terms, no admin fees, and users are able to move their funds into their normal wallet whenever they require it.
2.Interest is paid on the first of the month
Users can opt to leave their earnings in their savings wallet to compound and grow exponentially or they can withdraw the funds immediately.
To put into a clear perspective, saving one bitcoin at an interest rate of 4% per annum would generate the customer 0.04 bitcoin per annum (around R8,000 / $40 at the time of writing).
According to reports, the current interest rates offered by some of the country’s large banks, range from 1% – 4% per annum on flexible savings accounts.
A global research report by Luno discovered that 54% of people are currently earning zero interest on their cash savings. The current inflation is above zero and as a result, many of these individuals’ money “will have less purchasing power each year.”
Furthermore, the research conducted by Luno found that 40% of those surveyed lacked confidence in their local currency. In addition, 95% of active South African Luno customers indicated they would utilise a savings wallet that offered interest on their current Bitcoin balance.
Marius Reitz, Luno’s GM for Africa explains that a high percentage of South Africans own cryptocurrency for “speculative investment purposes”, holding onto their Bitcoin for the long term.
“Less than 5% of Luno’s South African customers plan to sell their Bitcoin in the next six months, in fact, most plan to buy more, so the savings wallet means they can earn interest by simply doing what they were planning to with their Bitcoin.”
Reitz added that there are untapped benefits to Bitcoin investment.
“More than 55% of South African customers indicated that they do not have investments other than crypto. It’s important to diversify investments given how new the Bitcoin industry is. Those who hold Bitcoin will no doubt find the interest-earning potential attractive,” he explains.
A volatile market
Although the price of Bitcoin is synonymous with being volatile, Luno claims that its long-term price trajectory has steadily risen.
“In a strong bullish signal, Bitcoin just set a new record of over 84 days closing above $10,000. Bitcoin is currently trading around $11,467 / R196,565 on Luno,” explains Luno.
Luno claims that Bitcoin has outperformed all major stock market indices, including gold, in 2020.
Featured image: Marcus Swanepoel, co-founder and CEO of Luno (Supplied)