While most of the world relieves the nightmares of an escalating altercation between the United States and Iran, activities have increased in the bitcoin market. The price of Bitcoin briefly hit the $8,400 level as Iran fired over a dozen ballistic missiles at US and coalition military bases in Iraq.
It is the first time since November 2019 the price is pushing above a 200-day average. On Wednesday morning, the price was at $8,310 on the Coindesk Index whereas in Iran investors bought 1 Bitcoin at $24,000. In Nigeria, the price is selling at N3.03 million on the Luno exchange as of the time filing this report.
“There is certainly a link with investors, for example, buying gold and using digital assets for a small – but potentially high return – part of their allocation, but at Luno we think the price increase in BTC is down to more structural reasons,” Marcus Swanepoel, CEO of Luno said in an email response to BusinessDay. “This year we have seen a steady increase in Bitcoin sentiment which could be linked to the expected halving in May, and we have also seen hash rates, showing the level of mining, rise to an all-time high. In 2019, there was also a 17 percent increase in long positions, which shows that there is a lot of interest in the leading altcoin which is helping to bring back buyers into the sector.”
Bitcoin began the new decade on a weak level, as a sell-off saw the price dropping below $7,000 representing a drop of as much as 4 percent on Thursday, 2 January.
The largest digital asset is coming off an eye-catching 2019 that saw gains of about 95 percent despite repeated bouts of volatility. However, the weak run in the first week of 2020 cast a pale on the market. LocalBitcoins, one of the largest exchanges in Africa, reported a significant drop in the volume of transactions for 2019.
Nevertheless, Gaius Chibueze, founder of www.abitrader.com, a cryptocurrency exchange said 2019 was a good year for Nigeria and Africa compared to 2018.
“More and more people came to know about Bitcoin in 2019 than previous years,” Chibueze said, “And the mentality around Bitcoin is slowly growing from speculative gambling to a solid investment. Before 2019 half of the people who bought Bitcoin in Africa bought into it through Ponzi and others get rich quick promise platforms. So when they weren’t getting rich as fast as they were promised many sold off which is why you talked of a drop in Volume on some exchanges. And Bitcoin dominance is also slowly reducing as many of us are beginning to diversify our investments into other good cryptocurrencies like Tatcoin, BNB, ETH, and others.”
Experts also say the price of other commodities like gold and oil went up following the Iranian revenge strike.
Meanwhile, Nigeria retained its spot as the leading country in the number of bitcoin searches in 2019 on Google, a position it took in 2018.
Nigeria shared the top five positions with South Africa, Austria, Switzerland, and Ghana. A report conducted by Luno in 2019, a global exchange with presence in Nigeria, on awareness of the cryptocurrency in Nigeria also found that Nigerians were more knowledgeable about the cryptocurrency than they were in previous years.
Nigeria made the most search for bitcoin between June 23 and 29 when the price of the cryptocurrency rose above $12,900 for the first time in over 17 months backed by consistent levels of volume. On June 26, Bitcoin broke out from a bullish pattern, rising in quick succession above $12,000 on strong momentum and high volatility.
The interest in Bitcoin dropped between July and August but picked up again in September this time below the June levels. Although the price dropped to $8350 in September, it was still about 2.5 times its 2019 low of $3,360, also set in February. It later broke the $10,000 level representing the highest closing price in 6 days.
Ekiti, Delta, Ondo, Edo and Osun states were the top five Nigerian states with the most searches. Interestingly, Lagos did not make the top ten states. The rest states include Ogun, Enugu, Bayelsa, Anambra, and Oyo.
However, data from coin.dance showed that by 28 December 2019 the volume of transactions on the LocalBitcoin exchange was in the red zone dropping to N477 million, indicating that awareness has not translated to demand.
The Nigerian government is expected to take decisive steps towards regulating the cryptocurrency market in the country in 2020.