From bitcoin bets to beer – your crypto questions answered

When South Africans first used crypto to pay at the till, some did it for their own amusement – could they buy a beer with digital money? Now, says Binance South Africa’s general manager, Hannes Wessels, the novelty is giving way to routine, including repeat weekly purchases of staples.

In this wide-ranging Q&A, Wessels (no relation) argues crypto is shifting as an investment, too. Even though it’s often marketed as “digital gold”, he says institutional investors such as pension funds treat it as a risk asset – closer to equities, high-yield credit and emerging markets than a defensive hedge. That, he argues, is why it often rises and falls with liquidity and risk appetite.

Before we get into price and predictions, what’s the big idea you want people to understand about crypto right now?

For me, it starts with one thing: education leads investment. You need to understand what you’re buying. [Crypto is the umbrella term. Bitcoin is the price-volatile token people often treat as an investment. Stablecoins are crypto tokens designed to hold a steady value, usually by tracking the US dollar.]

Even with more institutional participation, I still see crypto as a high-risk asset. It can move quickly and doesn’t behave like cash in the bank. People need to be honest about their risk appetite and how much of their portfolio they’re prepared to put into volatile assets.

Another big shift is the rise of stablecoins. They make up a large portion of market activity, which tells you crypto isn’t only about speculation any more. A growing share is about moving value efficiently.

And I don’t think the old, neat story of a four-year crypto cycle [a pattern in which prices tend to move in boom-and-bust waves when supply slows] is as dominant as it once was. Crypto is increasingly influenced by interest rates, liquidity and global risk sentiment. When money is easy and investors are comfortable taking risks, crypto tends to do better. When conditions tighten, it tends to behave like other risk assets.

With gold and platinum surging, where does bitcoin fit? Is it still “digital gold”?

People often call bitcoin “digital gold”, but it can be misleading – especially when you look at how professional investors treat it.

When an asset becomes widely held in the institutional market, it tends to be put into a bucket – a category – and bitcoin (and much of crypto) generally falls into the risk-asset bucket. In other words, it sits on what I like to call “the right end of the spectrum”: it can perform well when markets are optimistic and liquidity is flowing, and it can struggle when investors get cautious.

Gold is different. In periods of uncertainty, investors typically rush first to traditional safe havens like gold – rather than to crypto. And bitcoin is still relatively small compared with the broader universe of investable assets.

You seem sceptical about how long this gold move can last? Deutsche Bank predicts the gold price will rally to as high as $6,900 an ounce, while JPMorgan names the precious metal its “highest conviction” at $5,055-$5,550.

The question is how much momentum this has. The rise has been parabolic. I just think we’re in bubble territory. I can’t see this going on forever.

What signals are you watching for a potential turnaround?

The US has an enormous debt pile – and a big chunk of that needs to be refinanced. When refinancing gets expensive, it puts pressure on the system, and markets start looking hard at whether the US is heading for easier monetary policy and more liquidity.

So I watch the indicators that tell me whether money is loosening. The first is money supply – is there more cash sloshing around in the system or less? When money supply is growing, risk assets tend to breathe easier. When it’s shrinking, things get tighter.

The second is the Fed’s balance sheet – whether the Federal Reserve is adding liquidity or draining it. If it starts turning up, even slightly, it can be an early hint the environment is shifting. And now, for the first time in ages, I’m seeing a blip indicating the Fed is growing its balance sheet again.

If crypto is still a high-risk asset, how should ordinary investors think about allocation – and where do they learn the basics?

It’s up to everyone to determine the percentage allocation in their portfolios. Some traditional asset managers say start with 5% – but understand what you’re getting into. I point people to our educational section at academy.binance.com.

South Africa’s banking system is evolving rapidly, with PayShap and API payments enabling apps to trigger bank transfers instantly. Does that help crypto payments – especially stablecoins – or compete with them?

South Africa already has a well-functioning banking system – and it continues to evolve. With API payments and PayShap, bank transfers are becoming faster and easier, even inside apps. That begins to compete with some crypto use-cases, especially simple peer-to-peer transfers.

It doesn’t mean crypto goes away. It means crypto has to prove its value more clearly – whether that’s for merchants, cross-border payments, or niches where traditional rails are still slow or expensive. And from what we’re seeing, crypto payments are still growing.

Is paying with crypto still a novelty, or is it becoming a habit?

The growth has been rapid; much more than 100%. It used to be a novelty – people seeing if they could buy a beer with crypto as a joke. But now, retailers see what is known as a “sticky” product, especially with staples such as bread, milk and eggs. Every week, we can see those payments going through. It’s moved beyond novelty to almost becoming a utility. [These day-to-day payments are typically made using stablecoins or instant conversion at the point of sale, rather than spending long-term bitcoin holdings.]

Stablecoins keep coming up in your answers. Why have they become so important?

If you look at stablecoins, the volumes going through the system are significant. They were intended as a trading pair for bitcoin – a counter-instrument – and they’ve lasted. They’re collateralised, so they work – and that has opened up so many possibilities.

Remittances in Africa are still expensive. Where does crypto help people send money home, and why do you call merchant adoption the “secret sauce”?

Migrant workers want to send money back home. That system is still failing, and crypto can definitely solve that problem. The bottleneck is at the utility point; you still can’t spend your stablecoins [in most places] – the secret sauce lies in merchant adoption. By the time it reaches the beneficiaries, some people take up to 25% of the value. We can do that at Binance at 0.1% [of the total transaction value when the UN estimates that sending $200 to Sub-Saharan Africa costs nearly 9% on average – far above the 6.4% global average].

Let’s chat about the regulatory landscape. What does “good regulation” look like?

You need regulators that are fast followers. Regulators aren’t innovators. The market will always move first. What you need is a regulator that understands what’s happening, learns from global best practice, and moves quickly to set rules that protect consumers and the integrity of the system.

That’s why I think South Africa’s decision to place crypto oversight under the FSCA [Financial Sector Conduct Authority] was a smart move. It brought the industry into a more formal framework – clearer on who can operate, which standards apply, and what happens when something goes wrong. It gives users more recourse and creates safety. And, in my view, that stronger supervision is consistent with the broader push that FATF [the Financial Action Task Force] encourages on anti-money-laundering and financial controls.

And specifically, on stablecoins and exchange controls – what’s your message to the South African Reserve Bank (SARB)?

We now need to shift focus to the SARB, specifically the treatment of stablecoins. I believe we shouldn’t penalise stablecoin holders. When you trade a stablecoin for a hard-dollar bank account, that’s externalisation. But just holding a stablecoin is an opportunity for residents to keep capital within the country. The monitoring of this, if you have the tech, which is exactly what blockchain can do, is a lot easier than going through the banking system.

Lastly, safety: people entering the crypto world are concerned about scams. What are your top safety rules for ordinary users?

Again, it starts with education. Know what you’re dealing with – it’s not a casino. Always stay within the app. Verify who you’re dealing with if you get a call or an email. Our email verification system can confirm whether an email or website is legitimate. Never share your login details. Be optimistic, but keep a healthy dose of scepticism. If the returns are too high, there’s always a reason for that. And make sure you’re dealing with a regulated entity; you can always check it on the regulator’s website.

ALSO READ:

• The big split: Why gold is acting like a reserve asset and bitcoin isn’t
• Crypto’s big shift: Value and velocity collide
• Crypto: Has the banking industry finally surrendered?

_{Top image: Hannes Wessels. Picture: supplied.}