Bitcoin trade in Nigeria dropped by 15.9 percent to N1.365 billion at the end of the second week of November, 2017, from N1.582 billion volumes it saw on the first week, according to the Coin-dance Index.
The drop came in just two days as many investors began to switch to rival cryptocurrencies like Bitcoin Cash which split from the original bitcoin in August. The investors move was necessitated by global concerns over the future of bitcoin.
As price of bitcoin went downward, Bitcoin Cash soared nearly 19 percent. The Bitcoin Cash ramp up was boosted by the cancellation of SegWit2X – a bitcoin network upgrade plan that supposed to fix bitcoin’s scalability problem and increase the blocks size in order to process more transaction volume with reduced fees. It reached an all-time high of $1,810 on many exchanges at the weekend. It has since dropped around $1,300.
It should be noted that Luno, one of the global exchanges that operate in Nigeria, launched its Ethereum platform to encourage investors to invest locally.
The value of bitcoin on the other hand, was wiped off by as much as $30 billion. The price had reached an all-time high of over $7,800 last week only to go tumbling to as low as $6,475.40 according to the Coindesk Bitcoin Price Index.
Tim Akinbo, a bitcoin expert and founder of Nigeria-based bitcoin exchange platform, Tanjalo.com, said he did not expect that volume will continue to rise indefinitely. Some weeks are bound to experience some downs.
As at time of writing on Wednesday, the price was at $6,581.26.
Naira Exchange, another Nigerian exchange, has since taken precautionary measures to contain trade volumes. In a recent announcement on social media, the exchange said:
“Due to the escalating bitcoin transaction fees, the minimum order amount has been increased to N25, 000. Any bitcoin less than N25, 000 will not be processed. The limit will be revised once the bitcoin network is less congested and fees back to normal.”
The exchange later explained to BusinessDay in an email, that their announcement was necessitated due to bitcoin network is experiencing a huge backlog of over 124,423 unconfirmed transactions causing the transactions fees to skyrocket to average $12 to $17 to send a bitcoin transaction.
In view of investors switching crypto assets, Nairaex said they “are seeing bitcoin clones like Bitcoin Cash as the future of payment since block sizes are larger and transaction fees are lower. Bitcoin Cash and Bitcoin Cash is gaining traction among Nigerian traders since its view as Bitcoin silver – a cheaper alternative to bitcoin. We are currently testing trading support for Bitcoin Cash on our platform.”
