Luno data reveals the habits of the South African crypto buyer

It’s no surprise that the average South African crypto buyer is male. But data like the average first spend of R450 and eight month holding period paints an interesting picture as global events drive interest in cryptocurrency.

“South Africa is one of our strongest markets, in fact, South Africans make up about 43 percent of our verified customers,” says Richard Ball, lead data scientist at Luno. “Over the past year, we verified more than three million new users worldwide. As we expand into new territories, the trend is starting to shift. ”

Malaysia now makes up almost 14% of Luno’s customer base, up 8% year-on-year.

South African customer behaviour

“Most customers start with a relatively small deposit, while the top 25 percent of our biggest local customers start to buy crypto at around R1 500 and the highest deposit amount among our smallest 25 percent of customers is only around R90.”

Ball says these metrics are good news for Luno, as they indicate that South Africans are investing in crypto responsibly. Luno allows customers to buy crypto for as little as R1 in line with its mission to ensure wider access and encourages people to start with smaller deposits while they learn more about crypto.

South Africans usually start with an average first deposit of R450, an increase since the November 2021 BTC dip

South Africans’ most popular crypto coins

“The greatest increase so far this year in demand is XRP, with a 25 percent price surge within a single week. USDC, a cryptocurrency linked to the US dollar, is the least popular on Luno’s platform, in line with its status as a stable coin.”

Ball says customers bought USDC during the market dip in the past few months. “When crypto prices fall, some customers buy into USDC to shield themselves from further market volatility. Once volatility has cooled down, traders will typically move from USDC back into crypto such as BTC. In some sense, this is in line with traditional financial markets where investors avoid risk and move to cash during periods of uncertainty.”

The most popular crypto coins in SA are Bitcoin, Ethereum and XRP, with 80% of customers buying instead of selling

Who are South African crypto buyers?

The local buyers are almost a mirror image of the global picture. In line with the gender split in traditional financial services, more men are buying crypto in South Africa than women.

South African customers hold their crypto for an average of eight months, which is much longer than two years ago, with the exception of traders, who would naturally be more active, Ball says. “Overall, this indicates that South African customers increasingly view crypto as a longer-term investment and are not necessarily buying it to make a quick buck.”

About 30% of 18–29-year-old Luno customers are women, rising to a high of 46% in the 60+ age bracket

Behaviour depends on when customers buy

“We frequently perform cohort analysis to track the transactional behaviour of customers who first bought at a particular point in time,” Ball explains. “They are grouped into a cohort, for example, the 2017 or 2018 cohort.”

“Customers who bought during the peaks in 2017 or 2021 tend to display different holding period behaviour compared to customers who bought when the price action was much flatter.”

Customers who first bought when the price was surging might be more speculative

Greater use of Luno’s savings wallets

“There has been a 15 percent increase in local customers using the savings wallet over the past three months,” he says.

“The interest earned on crypto holdings via savings wallets is paid monthly. Luno customers can earn interest of up to 7.6 percent when they open a Luno savings wallet. Since South Africans are holding on to their crypto coins for longer, it makes sense to earn interest until they are ready to sell.”

About 7% of Luno customers use the savings wallet monthly.

Repeat customers

According to Ball, more than 1o percent of active Luno customers have used the repeat buy function in the past three months, with South Africans buying an average of R400 worth of cryptocurrency per month using this facility.

Repeat buy is an instruction to buy into the market at regular intervals and is a great way for customers to buy crypto without having to time the market. Without a repeat buy instruction, you need to keep a very close eye on movements in the market to ensure you buy when the price dips and sell when it rises.

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