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25 September 2020
CAIRO – Bitcoin’s daily value skyrocketed on September 16, according to the CoinDesk website that specializes in monitoring cryptocurrency news. It fluctuated between $ 10,662 and $ 11,099, a 32% increase from its value in September 2019, when it stood at $ 8,085. These rapid increases may attract many Egyptians to trade Bitcoin as a means of achieving wealth.
Al-Monitor spoke to Muhammad Abd el-Baseer, Bitcoin mining and trading expert and a leading member of the Bitcoin Egypt Community, one of Egypt’s professional online communities for those interested in cryptocurrency courses, advice and advice. Baseer confirmed a recent increase in the number of community members, considering it a sign of strong demand for Bitcoin mining and trading in Egypt.
He argued that the huge shift in business towards online work from home coupled with reduced working hours and curfews are encouraging thousands of Egyptians to invest their free time in unusual online activities such as cryptocurrency mining and trading. , especially bitcoin. Online work from home, reduced working hours and curfews have been imposed since March as precautionary measures against the outbreak of COVID-19 in Egypt.
“The growing number of Bitcoin miners and traders is a global phenomenon that has been one of the multiple factors behind an increase in demand for bitcoin, and by extension the rise in the price of the currency itself. This has allowed those who l ‘they’ve gotten the year or early months of this year at prices below the current price in the past to reap unprecedented profits, and many Egyptians are looking at these levels of profits through their cryptocurrency investments, ”he added.
A Bitcoin miner, who is a member of many Bitcoin and cryptocurrency communities such as Bitcoin Egypt, told Al-Monitor on condition of anonymity that he opted for this business after losing his job at a contractor due to downsizing in the middle of the coronavirus epidemic. He has invested in this profession what he has managed to save in recent years.
Wael al-Nahhas, an economist and financial advisor to numerous investment institutions in Egypt, told Al-Monitor that he thinks the unemployment and recession resulting from the spread of the coronavirus and the precautionary measures taken are the main reasons behind the tilt of the young people towards bitcoin trading and mining.
Unemployment in Egypt went from 7.7% in the first quarter of 2020 to 9.6% in the second quarter; more than half a million Egyptians have lost their jobs.
The Bitcoin miner noted that the Bitcoin mining and trading fields are attracting thousands of Egyptians, as they don’t require huge capital to get started, while the savings and capital of millions of Egyptians are very few in light of the country’s recession.
“Many young Egyptians have started investing in small amounts despite the rise in bitcoin value. They have started mining Satochi, which is 100 millionth bitcoin, and on a daily basis they make profits of 4% to 5% from the difference between purchase rates during the time of falling demand and sales rates at the time of peak demand. , as well as some quarterly or annual profits from unexpected bitcoin rate hikes, “he noted.
Ahmed Shuair, a lecturer in economics at Cairo University, told Al-Monitor that many Egyptians were encouraged to mine and invest in cryptocurrencies after cryptocurrency brokers were able to provide guarantees on the protection of miners’ balances by providing electronic payment cards at all. their global customers, through which any amount can be withdrawn from ATMs at any time.
“These are database-linked balances of giant companies like VISA or Mastercard and cannot be tampered with by any broker,” he said.
Baseer pointed out that the steps to order a payment card, have it shipped, delivered, and set up a security key, as well as the steps to use it to cash out the balance of the cryptocurrency wallet in traditional currencies (such as the Egyptian pound) that can be withdrawn from ATMs, they are very simple and many Egyptians have already done so.
“The availability of those cards and the ability of miners to withdraw any part of their balances in real time have encouraged more Egyptians to join the Bitcoin and cryptocurrency mining and trading activities, as it is guaranteeing its entire digital and virtual investment process. an easy materialism result represented in the cash result, “he said.
Al-Monitor searched for studies on the number of Bitcoin miners and traders in Egypt, but without success. However, Baseer said more than 16,000 Egyptians joined the community. “But the number of miners in Egypt is expected to be greater, as each of the 16,000 can train and guide many of their friends, family and neighborhood areas,” he added.
However, Nah warned that investing in bitcoin is unsafe because brokerage offices do not provide the central bank of any country, including the Central Bank of Egypt, with cash backing or a gold reserve equal to the balances deposited with it. “In this case the miners cannot recover their deposits and balances from the brokers if they fail or refrain from paying,” he said.
“This is not the only risk for Egypt. There are many cryptographic risks of the currency and the inability to track ownership of the digital currency, even through brokerage offices – and therefore, some may exploit this secrecy to finance terrorism or illegal trade. This is why the Egyptian authorities are arresting and prosecuting miners and cryptocurrency traders, “he added.
Mohamed Mohsen, an Egyptian lawyer specializing in financial cases and a Bitcoin miner, told Al-Monitor that Egyptian Central Bank or public funds laws do not criminalize cryptocurrency trading and that they arrest or legally try any Egyptians for dealing in cryptocurrency was due to the use of cryptocurrencies in a crime such as terrorist financing or fraud.
In June 2016, authorities arrested a dentist for defrauding groups of citizens by taking their money by claiming they would invest for them in mining bitcoin and Ethereum, the second largest cryptocurrency platform. A programmer was arrested on similar charges in June 2020.
Shuair said the main danger of the Bitcoin and cryptocurrency business in Egypt is the absence of a clear law establishing the cases in which mining and trading of them is considered as a legal act and cases in which they are considered fraud. .
On the future of Bitcoin in Egypt, he stressed that the Central Bank of Egypt is expected to legalize cryptocurrencies soon. According to him, the Central Bank was preparing to enact a law in January, but the coronavirus outbreak may have changed the bank’s priorities.
But Shuair noted that many Egyptians will pull out of this business once they feel profits drop as cryptocurrency markets reach customer saturation. “This will make bitcoin’s jumps in value less profitable than any fiat currency,” he concluded.
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