Bittrex Becomes Frontman Investor in VALR Trading Platform’s $1.5 Million for South African Expansion
Bittrex Leads a $1.5 Million Seed Round for VALR to Promote “Untapped Potential” of the South African Market
The South African market for cryptocurrency is starting to grow, which Bittrex CEO Bill Shihara wants to be a part of. Recently, South African trading platform VALR got some help from Bittrex when they led a $1.5 million seed round for the company.
Michael Jordaan, another investor for the VALR platform, said that the support that the company offers for 50 different cryptocurrencies will make it one of the most diverse selections for the African economy on March 1st. He added,
“The VALR team has the potential to change the cryptocurrency landscape in South Africa and globally.”
The co-founder and CEO of VALR, Farzam Ehsani, said that there is already a waiting list for the platform with 1,500 users already excited for the launch. While waiting, they have started to activate their accounts during the closed beta stage, preparing for the mainnet.
Ehsani believes that the relationship with Bittrex will help with the liquidity of the crypto exchange, along with competitive pricing on crypto-to-crypto trading. In the meantime, his team has to work on the on-ramps for fiat. Ehsani added,
“Companies are not allowed to go and buy [large amounts of] crypto from offshore markets. This makes it very difficult for crypto exchanges in South Africa to access liquidity from international markets. [South Africans] want their hands on a store of value that doesn’t depreciate the way the rand has.”
The South African rand has lost nearly half of its original value so far, and the capital controls in place make it nearly impossible to transact a surplus of $72,000 across borders. Unfortunately, this leads to high premiums for bitcoin sales on P2P exchanges, like LocalBitcoins. Globally, the rate is about $3,800 for Bitcoin around the world, while South Africa ends up paying over $4,100 for the same single Bitcoin.
Explaining the growth of the South African market with bitcoin exchange and wallet provider Luna, manager Marius Reitz said,
“Most of the growth is driven by South Africa.”
A recent survey shows that, out of 1,000 local residents surveyed, 167 people use Bitcoin as payment. Reitz continued,
“Specifically in South Africa we see a situation were a lot of people move from elsewhere in Africa to look for jobs and they send money back home.”
Optimally, the gap between African banks and the global crypto economy will be closed with the implementation of VALR. Reitz and Jordaan have both commented that new exchanges, like the ones mentioned above, will move along the progress made on standards for the crypto industry and crypto regulation.
“Because several of the countries around us actually peg their currencies to the rand, if we do well, we have the ability to influence other countries in the region, and Africa as a whole.”
Overall, Ehsani hopes to reach beyond South Africa, considering that they follow know-your-customer protocols that are widely required around the world already.
Right now, the South African exchange users are mostly speculative in their habits. However, the remittances in and out of the region provide a positive use case, considering the major expense of local remittance services.
As far as the impact that these exchanges have on mainstream local adoption, Ehsani added,
“Cryptocurrency will start bringing communities together through their ability to transact and send value back home much more seamlessly and cheaply than their current options.”