Nigerians have traded 60,215 bitcoins (BTC) worth more than $566 million between 2015 and 2020, making the country the second-biggest bitcoin nation in the world and the biggest bitcoin trader in Africa.
Only the US has traded more bitcoins (535,660), according to data from Paxful, a global cryptocurrency exchange.
The Paxful data also showed that 2020 saw more bitcoin trading in Nigeria than any other year, with a bitcoin trade worth $213,719,383. This represents an increase of 102 percent from 2019. There has been a steady increase in traded bitcoins from January 2020 to August 2020, with July seeing an all-year high in trading (2,664.8 BTC).
The year 2020 has particularly seen huge activity from the country because of the twin effects of the COVID-19 pandemic and the recession of the country’s economy. During the lockdown, not only were businesses shut, banking operations were limited forcing many companies to seek alternatives payment channels to survive.
The Paxful data aligns with a new report by Luno in collaborations with Arcane Research which found that the state of the economy has contributed to people’s decisions to adopt cryptocurrencies.
The research titled The Great Money Experiment found that many Nigerians are pessimistic about the direction of the local economy. The growing uncertainty is driven by rising unemployment rates, dwindling consumer spending, and a general direction of the macroeconomic indicators.
The report found that 44 percent of respondents are pessimistic about the development of the Nigerian naira. The researchers note that 44 percent is not that high considering it is below the global average, but it is a massive change compared to the increase from 2019. The percentage of people that see their currency decrease in value has almost doubled, from as little as 23 percent in 2019, to 44 percent this year.
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The Central Bank of Nigeria (CBN) recently devalued the naira to N390 from N380 after its many fiscal policies failed to strengthen the currency. The currency is trading at 470 against the US dollar in the parallel market. The growth in exchange is coming at a time when the country’s inflation rate surged to 14.23 percent (year-on-year) in October 2020 from 13.71 percent recorded in September 2020.
The researchers said the negative growth is responsible for the greater number of people in Africa who are eager to embrace a global currency. Nigerians interest in the cryptocurrency market has peaked in recent times. Between 2018 and 2019, the country emerged number one in terms of searches for bitcoin in the world.
Ray Youssef, CEO of Paxful notes that Nigeria has problems and restrictions in sending and receiving money from inside and outside its borders.
“The lack of bitcoin liquidity was the first obstacle to solve to introduce bitcoin to Africa,” Youssef said.
So far in 2020, Nigeria has traded more bitcoins than any other African country, according to Paxful. It has traded 10 times more bitcoins than Kenya which is the African country with the second-most traded bitcoins.
The lockdown period was also a high point for many Nigerian bitcoin traders. The months to the lockdown saw the highest increase of traded bitcoins with 30.8 percent more bitcoin being traded in May than in April.
