This graph shows just how popular Bitcoin is in South Africa

Bitcoin is seeing increasing popularity in South Africa and other frontier markets where it is viewed as a haven from political and economic turmoil.

It is also increasingly becoming a means of navigating financial obstacles, like the lack of conventional banking services or limited access to foreign currencies, and even a way to skirt sanctions, according to a new report by the Wall Street Journal.

Mati Greenspan, an analyst at online trading platform eToro, said there was a noticeable surge of South African Bitcoin traders on the platform amid the heightened political pressures of the last year.

“In South Africa, the number of new users trading bitcoin through eToro rose by 671% from January to the end of November last year over the same period in 2016, more than the 574% overall growth,” Greenspan said.

He said that the surge in interest began in March, when respected finance minister Pravin Gordhan was fired, increasing again in November when S&P Global Ratings downgraded South Africa’s local currency debt to junk status.

A similar increase in interest was seen in Brazil and the Czech Republic in 2017, although neither country seemed to share the same enthusiasm for Bitcoin as South Africans according to eToro’s data.

However the report noted that there are unique risks for South Africa and other frontier markets – particularly as these Bitcoin traders typically just have less money to lose than in the developed world.

This means that the recent drop in Bitcoin value was likely to hurt South Africans more than most, as the price quoted on CoinDesk fell by more than a fifth from a high of $19,343 in mid-December to $14,869 on Wednesday.

Speaking to BusinessTech in November, Werner van Rooyen, head of marketing for cryptocurrency exchange Luno, said that thousands of trades were being made by South Africans every week. Looking at the cryptocurrency exchange one year ago, roughly 1,000 BTC was being traded per week at a rate of R11,086 a coin.

As of 5 January 965 BTC is being traded in a single day at a rate of R212,000.

While this exponential growth can be explained by the sudden rise in value of the currency as well as higher volumes of trade, it is still almost impossible to tell exactly how many South African have invested in Bitcoin over the last year, or are currently invested in the currency.

“It is nearly impossible to give an accurate number for this,” said van Rooyen. “It’s pretty simple to get a Bitcoin wallet (with a BTC receive address) and to create multiple receive addresses. This is why most journalists and researchers struggle to give an accurate number.”

The popularity has not gone completely unnoticed however, as in December the South African Revenue Service said it was in discussions with a number of technology companies to enable it to track cryptocurrency trades more efficiently.

“As you can imagine it is very difficult – the blockchain technology. Without revealing too much – we are talking to some of the top technology companies in the world that are doing similar work for Canada and the UK and we are hoping to get that technology,” said Dr Randall Carolissen, Sars group executive for research.

Read: US regulator imposes “heightened review” on bitcoin derivatives