The price of bitcoin crossed the $50,000 mark in August only to retreat to below $48,000 on the last day of the month. However, the rally is likely to continue in September on the back of more institutional and state investors coming into the market. Nigeria is also being primed as the ground zero for adoption.
The last time the largest cryptocurrency saw an all-time high was on April 14 when it hit $64,234. Thereafter, it went on a decline dropping to $29,601 on July 21. The price has since rallied to $50,319 as of August 23. On Wednesday, 1 September bitcoin was exchanging hands at $47,761, its market valuation is at $898.7 billion which is more than most big quoted companies.
Activities on the bitcoin network have started to rise again reaching around 275,000 per day, although it is still around 35 percent below the January peak.
The activities are mostly driven by institutional and state actors like Twitter, states in the US, countries like Singapore, Cuba, and others who are clarifying their position on the market.
Read also: Nigeria powers SSA to lead global P2P bitcoin market
The Monetary Authority of Singapore (MAS) in a statement on Wednesday 1 September said it has issued a digital payment token licence to local fintech company FOMO Pay. The licence enables FOMO Pay to provide payments services using digital currencies, including CBDCs and crypto tokens.
This is the first full issuance of such a licence. The same MAS had in August, MAS granted an approval in principle to Australian crypto exchange Independent Reserve for a DPT licence. Several other digital payments providers are expected to be issued the licence soon.
The Cuban government published a new set of rules for how to deal with digital currencies in August. Resolution 215 published in the state-run Official Gazzette noted that commercial providers of cryptocurrency services will now need a licence from the central bank to continue operations. Cuba is joining El Salvador in embracing decentralised virtual cash and is also looking for ways to circumvent the US embargo on the communist state which has turned it into a pariah state in the global economy.
Also in August, Jayson Stewart the Mayor of Cool Valley in the US state of Missouri said his government was raising money to give each of its roughly 1,500 residents $1,000 worth of bitcoin.
But the bitcoin market continues to come immense scrutiny from regulators in other parts of the world which could also push down prices in September. Binance, the world’s biggest crypto exchange has been the most target with countries such as the UK, Italy, Germany, the Netherlands, Japan, and Hong Kong placing a ban of warning about offering certain crypto investments to consumers in these places. The pressure has seen the company inform its users they would henceforth provide an identification document and photo of themselves to verify their identity. BitMEX, another large exchange, paid $100 million to settle a US regulatory investigation related to claims of illegally selling derivatives and lackluster anti-money laundering compliance.
In Nigeria, the cryptocurrency market remains under restrictions from critical support from banks and other financial institutions.
Nonetheless, institutional investors like Twitter are pushing deeper into the market. Jack Dorsey, the CEO of Square and Twitter said that his payment company, Square’s new division, which is focused on creating an open developer platform, is planning to build a decentralised bitcoin exchange.
The new Square division is aiming to make it easy to fund a non-custodial wallet anywhere in the world through a platform to build on- and off-ramps into Bitcoin.
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