Buy Bitcoin, Ethereum and Crypto in South Africa 2022: Beginners Guide

Did you know that South Africa is ranked 16th globally and 4th in Africa among countries with the highest crypto adoption? The fete was a result of more investors turning to Bitcoin, Ethereum, and other crypto investing/trading over the last few years.

You too might be interested in crypto and probably considering diversifying your portfolio and incorporating crypto. But do you know what you need to start?

This is a complete guide to buying bitcoin in South Africa in 2022.

In this beginner's guide, you will learn different ways to invest in Bitcoin in South Africa. Importantly, We tested some popular bitcoin brokers available in South Africa, according to reputation, regulation, cryptocurrency pairs, and availability, we picked the 5 best places to buy and trade Bitcoin and other popular cryptocurrencies.

So, if you’re ready to go “all in” with how to buy and invest in crypto, read on.

While there are multiple ways through which you can buy and invest in cryptocurrency, three have taken root in South Africa. They include consumer-to-consumer trading, spot trading, and derivatives trading.

To help you understand their differences and how they work, let us go over each of these in detail below:

● Consumer-to-consumer (Peer-to-peer) trading

In peer-to-peer trading, crypto investors and traders get to buy Bitcoin directly from other crypto investors. By design, peer-to-peer trading shouldn’t involve intermediaries. But if you have been watching recent crypto developments in South Africa, you must have noticed the proliferation of third-party web- and app-based platforms that facilitate P2P trading. 

These have played a key role in helping the country feature among the top 5 P2P crypto trading nations in Africa.

P2P trading sets itself apart from other forms of trading because it gives you access to more payment options and the ability to buy Bitcoin and other cryptos with the local currency (Rand).

● Spot trading

Spot trading Bitcoin and other cryptos often take on crypto exchanges and brokerages. Unlike peer-to-peer trading platforms that facilitate localized crypto trades, exchanges give you access to the global market. With the exchange serving as the intermediary between the buyer and seller, it shields your identity from the buyer or seller.

Some of the advantages of using Bitcoin brokers in South Africa include access to deep liquidity and lower trading costs. You are exposed to a wider variety of crypto assets. Not to mention that some Bitcoin exchanges will provide you with personalized crypto wallets.

The downside to buying Bitcoin from exchanges would be most do not support localized payment methods like Mint or Mobiamo.

● Crypto derivatives trading

Crypto derivatives are different from the spot and peer-to-peer trading because they do not involve owning the underlying asset. Rather it involves speculating and betting on or against the future price of a cryptocurrency. 

The most common forms of crypto derivatives in South Africa include CFDs, futures, and options. These are provided by crypto brokerages and exchanges.

The upside is you do not need to worry about the security of your private keys. Further, derivatives trading is liquid, maintains low transaction costs, lets you go long (BUY) or short (SELL) on crypto, and lets you open leveraged trades. Many Crypto derivatives trading platforms offer leverage of at least 10:1.

How would you trade bitcoin? Let's shift to the best platforms we picked for different traders' needs.

Here is our list of the popular crypto and crypto derivatives trading platforms in South Africa

• MiTrade - Best for Ease of use with leverage

• Binance - Best for low fees and high liquidity

• Coinbase - Best for Instant Trading

• Luno - Best for Interest on Crypto Savings

• Kraken - Best for Safe Crypto Storage

We checked these crypto trading platforms in detail, looking at how work, the costs, their customer support, and selected these 5 different brokers including Bitcoin leverage trading, Bitcoin spot trading, and crypto savings.

1. MiTrade - Best for Ease of use with leverage

MiTrade is a fast-growing multi-asset trading platform. It started in 2011 in Australia specializing in forex, commodities, and indices. Now MiTrade has extended its product list and reach to cover cryptocurrencies in tens of countries, including South Africa. Here, it stands out as one of the most user-friendly crypto derivatives trading platforms.

MiTrade supports10 crypto including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Solana (SOL), Cardano (ADA), Uniswap (UNI), Dogecoin (DOGE), and Polkadot (DOT). You can use deposit and withdraw from the platform using such popular payment methods as Bank wire, debit-credit cards, and popular eWallets like Skrill, Poli, Moneybookers, and WorldPay.

MiTrade is also commission-free. There are no minimum deposits and it doesn’t impose a transaction processing fee on deposits and withdrawals. Here, you only get to part with a variable Buy/Sell spread when trading Bitcoins CFDs and a rollover fee for overnight trades. 

The brokerage also has one of the easiest and most transparent onboarding processes. You get to see all the trades acting on your trade before you hit the buy/sell button when trading on the platform.

You also get to trade on MiTrade’s proprietary trading platform available as a web trader and on phone (both iOS and Android). On either platform, you interact with professional charts, a powerful and beginner-friendly user interface, multiple order types and execution modes, and a wide array of free risk-management tools.

2. Binance - Best for low fees and high liquidity

Binance launched in 2017 and has since morphed into the largest crypto exchange in the world. It is deeply liquid and appeals to South African crypto investors because of its ultra-low trading fees. These are in the form of maker/taker and range between 0.1% and 0.004%. Further, you get to enjoy a 25% discount if you pay the transaction fee with BNB tokens.

It also stands out for its support of one of the widest range of crypto assets and crypto trading pairs. At the time of writing, for instance, CoinMarketCap reports that Binance lists 405 coins. Moreover, it also supports 40+ fiat currencies, including the South African Rand (ZAR), on its recently launched peer-to-peer crypto trading pool.

The process of creating a user account on Binance is also easy and straightforward. The minimum deposit is also affordable, starting from $1. However, spot traders on Binance have limited deposit and withdrawal options because Binance doesn’t process direct fiat deposits. Instead, it connects you to third-party fiat-to-crypto exchange onramps where you can buy crypto and have it deposited into your Binance account.

Like most other exchanges operating in the country, Binance is multi-platform, available as a web trader and on phone (both iOS and Android). It also features a wide array of trading and market analysis tools as well as risk management tools.

Binance also provides custodial wallet services to all its clients. The crypto assets held on their platform are covered by Binance’s proprietary insurance scheme known as SAFU. But if you wish to have full custody of your private keys, you could use their mobile wallet app, the Trust Wallet.

3. Coinbase - Best for Instant Trading

Coinbase is an American-based crypto exchange that currently offers crypto trading services in 100+ countries across the world, including here in South Africa. It started in 2012 as a Bitcoin-only trading platform but has since morphed into a multi-asset exchange, listing more than 150 crypto coins and tokens. It makes it to our list of best places to buy Bitcoin in South Africa because of its beginner friendliness and instant-trading features.

The exchange features a simplistic user interface that is easy to navigate for novice bitcoin investors. You would also appreciate its resource-rich platform that contains advanced trading, analysis, and risk-management tools.

The Coinbase registration process is also easy and quite straightforward. There is no minimum deposit and the exchange is one of the few places where you can buy Bitcoin with a credit card in South Africa. The downside is that Coinbase will only accept USD, GBP, or EUR deposits. Therefore, you most likely will incur currency conversion fees when depositing into the exchange.

You can also buy Bitcoin on Coinbase in South Africa via the web trader or their comprehensive mobile trading platform (both iOS and Android). The exchange offers insured coin-custody services and self-custody services via its Coinbase mobile wallet app.

Both the exchange and wallet are also safe, supporting multi-factor authentication that features passwords, verification codes, and biometrics. Not to mention that Coinbase holds 98% of client crypto assets in highly secure offline vaults while fully insuring the 2% held in hot wallets.

 4. Luno - Best for Interest on Crypto Savings

Luno is the only Crypto exchange on this list with physical offices in South Africa. But that isn’t the only reason why it stands out as one of the best places to buy Bitcoin in South Africa. We include it here because of its competitive trading fees, its intuitive and easy-to-use interface, its fast transaction processing speeds, and above all, the interest in crypto savings.

The crypto savings are available on the Luno crypto wallet and rates start from 4% p.a., payable on the first day of each month.

The process of opening a Luno exchange account is equally easy and their verification process straightforward. The minimum deposit is $10 (or local currency equivalent). Fiat deposits into Luno can be made via Bank transfers in local currencies, including the South African Rand (ZAR). Plus, Luno adds to the list of exchanges that let you buy Bitcoin with a credit card in South Africa.

Luno is a multi-platform exchange, available as a web trader and as a mobile app (both iOS and Android). On either platform, Luno imposes maker/taker fees that range from 0.1% to 0%, depending on your 30-day trading volume. Moreover, the exchange provides digital wallet services and stores 95% of client crypto assets in offline wallets.

5. Kraken - Best for Safe Crypto Storage

We feature Kraken on our list of best exchanges to buy Bitcoin in South Africa because it has been repeatedly hailed as the most secure exchange around. Established in 2011 in the US, the Kraken exchange has never been hacked. In addition to security, however, we also appreciate its instant trading feature, its wide selection of crypto assets, and deep liquidity. With special acknowledgment of its dark liquidity pool, which allows pseudonymous trading.

The registration process on Kraken is quick and straightforward. The exchange doesn’t maintain deposit limits and only supports Bank transfers or crypto deposits.

Further, Kraken has one of the most innovative, user-friendly, and feature-rich trading interfaces. It is easy to navigate which makes it appealing to both beginner and pro traders, and it even lets you buy Bitcoins instantly in South Africa. The platform is also rigged with advanced research, analysis, and trading tools. Beginner traders can also learn how to buy crypto in South Africa from its content-rich educational section.

Kraken supports 100+ crypto assets and 7 international currencies. These, however, do not include ZAR implying that your bank will most likely charge a currency conversion fee for your deposit. The trading fees are, however, heavily discounted and are fixed at 1.5% at the instant buy pool. Spot trading, on the other hand, attracts maker-taker fees of between 0.2% and 0%, based on your 30-day trading volume.

After learning of the different forms of crypto trading platforms we have reviewed above, what should be your next move? What effective trading strategies can you take to make your Bitcoin and crypto trading successful?

Here are the 3 that we believe are most practical:             

Start by learning how to trade

Start by deciding if you want to trade or invest in Bitcoins and other cryptos. Investing is straightforward as it involves buying and hodling for years, but trading calls for the mastery of technical analysis and different trading strategies. You can check out online trading classes or follow comprehensive guides.

Learn how to allocate your crypto portfolio

Most financial planners advise that crypto traders and investors allocate between 5% and 40%. Around 5% for beginners and risk-averse traders and as much as 40% for highly experienced and risk-tolerant crypto experts.

Master risk management skills

This starts with an understanding of your risk tolerance and mastering the different risk-management tools. For starters, you may consider applying the 1% rule of trading. This implies that you can only risk 1% of your account’s total value on any given trade. 

To help you get started with investing in crypto, we will provide you with a step-by-step guide on how to buy Bitcoin in South Africa on MiTrade:

Step 1: Open the MiTrade website and click on the “Trade Now” button in the top right corner.

Step 2: On the registration form that pops up, choose to register with either email or phone number. You can also link the account to your Google or Facebook profiles or Apple ID. Proceed with the registration by keying in your personal information and verifying your identity.

Step 3: Once the account is approved, log in to your user dashboard and click on the “Funds” icon. Choose the “Deposit” option and select one of the supported payment methods. Customize the deposit by entering the amount you wish to deposit into MiTrade.

Note: The minimum deposit is $50 and the maximum you can deposit into an unverified trading account is $2000.

Step 4: once the deposit reflects in your account, click on the “Trade” icon on the user dashboard. Choose to buy “Crypto” and decide on the crypto you wish to buy.

Note: MiTrade currently supports 10 crypto assets and the default trading pair for each is CRYPTO/USD e.g. BTC/USD, ETH/USD, SOL/USD.

Step 5: Click on the BUY or SELL options and use the trading menu that pops on the edge of the screen to customize the trade. Set the trading amount, determine leverage, and set the take profit and stop-loss levels. View the trading fees and click the buy/sell icon to initiate the trade.

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The process of buying Bitcoin in South Africa is easy and straightforward. It starts with learning the different forms of crypto trading and the mastery of such effective trading strategies as risk management and portfolio diversification.

You then have to decide if you wish to trade crypto derivatives, spot, or simply invest over the long term. 

Depending on your trading strategy, choose a reputable trading platform e.g. MiTrade for Bitcoin derivative trading, register a trader account, verify identity, deposit funds, and start trading.

Frequently Asked Questions (FAQs)

Is it legal to buy Bitcoins in South Africa?

Crypto trading in South Africa operates in a legal grey area. In 2014, the Reserve Bank of South Africa issued an advisory paper that stated that Bitcoin and other crypto have “no legal status or regulatory framework.” Since then no legislation has been passed to either expressly authorize crypto as currency or trading instrument, and neither has one expressly prohibited the trade of these virtual currencies.

Is Altcoin trading in South Africa legit?

Yes, there are plenty of reliable trading platforms in South Africa that provide legit crypto trading experiences. The brokerages like MiTrade will even give you access to leverage while exchanges give you access to ultra-secure and insured vaults for your crypto assets.

What is the best place to buy Bitcoin in South Africa?

The answer to this question is relative and dependent on such factors as your trading experience, trading/investing strategies. For instance, derivatives traders will prefer trading on crypto brokerages while long-term investors may prefer crypto exchanges with insured offline vaults. This article however addresses both needs and provides you with a list of what we consider the best crypto brokerage and exchanges in South Africa in 2022.

Does Bitcoin trading attract crypto tax in South Africa?

Yes, incomes and losses from crypto trades and investments are taxed as normal income. It is the duty of every citizen to declare these gains and losses when filing their taxable income.

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