Evaluation of Bitcoin Investment Viability in Mozambique: Opportunities and Risks in an Emerging Market

Abstract

This study examines the viability of Bitcoin investment in Maputo, Mozambique, within the context of the growing global adoption of cryptocurrencies. The research highlights the advantages of Bitcoin, such as lower transaction fees and the elimination of financial intermediaries, offering greater efficiency and flexibility for merchants and investors. The blockchain technology underlying Bitcoin provides security and privacy in transactions, making them resistant to fraud. However, Bitcoin's high volatility presents a significant challenge, particularly in unregulated markets like Mozambique, where the lack of a clear regulatory framework limits wider adoption. Using a mixed-method approach, quantitative data were collected from 23 Bitcoin investors through structured questionnaires, and qualitative data were gathered from semi-structured interviews with three investors and a financial analyst. Statistical analysis, conducted using R software, included tests such as Chi-Square, Student’s t-test, Mann-Whitney U, Pearson correlation, logistic regression, and factor analysis to understand the investment patterns and motivations of investors. The results revealed no significant association between gender and Bitcoin investment recommendations, although education level showed a marginally significant relationship, indicating that individuals with higher financial literacy are more likely to recommend Bitcoin. The analysis also found no significant differences in investment returns between men and women, suggesting that investment strategy plays a more crucial role. Risk-seeking investors achieved substantially higher returns, reflecting the speculative nature of Bitcoin. The study's limitations include the small sample size and the lack of specific cryptocurrency regulations in Mozambique, which restrict the generalizability of the findings. Recommendations include promoting financial education programs on cryptocurrencies, considering the legalization and regulation of Bitcoin by the Central Bank of Mozambique, increasing the banking sector's involvement in cryptocurrency discussions, and expanding research on Bitcoin volatility and returns. These actions could contribute to a more secure and informed investment environment in Mozambique.