Why Is Bitcoin Trading at $37,000 in Nigeria?

Lavina Daryanani
Source: BuyUcoin

Bitcoin has risen by roughly 40% so far this year. In fact, as analyzed in a recent article, it is all set to register its best January since 2013. Over the past seven days, Bitcoin has registered five green candles. As a result, it appreciated in value by ~5% in the said time window. At press time on Monday, the largest cryptocurrency was seen consolidating around $23.7k.

On most exchanges Bitcoin is trading at the same value. However, the situation is chalk and cheese when it comes to Nigeria. Several market participants took to social media to highlight that the largest cryptocurrency is trading at a ~60% premium, around $37.2k, in the African nation.

Also Read: Nigeria’s Bitcoin P2P volume hits $400M in H1 2022, while Ghana and Kenya follow

Factors that influenced Bitcoin’s price rise

Nigeria is in the midst of transforming into a cashless economy. The government has been trying to eliminate excess cash in circulation. The Central Bank of Nigeria recently announced that Nigerians will not be able to withdraw more than 20,000 naira [€42 or $44] daily and 500,000 naira weekly from ATMs. The policy came into effect on Jan. 9.

However, from dealing with currency devaluation to recovering from the Covid constraints, Nigeria’s economy is yet to move on from the aftermath of the macro shocks. As a result, experts have reportedly warned that the poor timing of the latest policy implementation could decrease its effectiveness.

Furthermore, Nigeria is also phasing out its old currency with newly-issued paper. Nigerians have reportedly been waiting in long queues to get their notes exchanged. Alongside curbing corruption, this central bank initiative has also been taken by the government to foster digital payments.

Thus, Bitcoin trading at a premium in Nigeria amid its economic turbulence evidently highlights that investors’ are inclining towards cryptocurrencies to shield themselves.

In fact, people on Twitter also pointed out that the number of queries on “How to buy Bitcoin” peaked recently, thanks to Nigerians.

Alongside, it seems like citizens are also exploring the Bitcoin mining option. African nations have been leading the world Google searches for how to mine Bitcoin.

Also Read: Bitcoin On Track for ‘Best’ January in 10 Years

Bitcoin and its macro tailwind

Leaving aside Nigeria, it seems like Bitcoin is gradually getting out of the woods. After staying out of the “fear” zone for 11 back-to-back days, it is now at a 1 year high. From early January’s lows of 25, the reading of the said metric is up to 61 already, bringing to light the rising investor confidence.

Despite shedding more than half of its value over the past year, the masses’ trust w.r.t. Bitcoin has not faded away. The current investor sentiment as highlighted above and the rising demand in Nigeria serve as typical exhibits.

Also Read – Bitcoin: Nigeria Considering To Legalize Crypto Usage