It’s been about two weeks since Nigeria’s Apex bank prohibited regulated financial institutions from dealing with Cryptos or face the wrath. At the fear of Nigeria’s Central Bank, financial institutions immediately began to close crypto-related firms.
In the wake of such a ban, the demand for Bitcoin by Nigerians had exponentially grown so much that it outstrips the African continent.
According to a recent study seen by Nairametrics, data retrieved from Usefultulips (a Bitcoin analytic data provider) revealed that the use of Bitcoin for peer-to-peer lending in Nigeria surged by 16% since the CBN directive took effect about 17 days ago.
Such high demand for Bitcoin by a growing number of Nigerians has led the unofficial crypto market popularly known as the black crypto market to thrive.
A recent study by Nairametrics reveals Nigerians are made to cough a hefty premium on Bitcoin, as recent macro reveals Bitcoin goes for as high as about $75,000 a premium of 36% through these dark channels.
This has caused high discontent and increased the complexity in making Bitcoin transactions through the naira. This is particularly prevalent among a significant proportion of young Nigerians because payment partners that transact with the local currency are no longer willing to deal with Crypto exchanges due to the directive of the Central Bank of Nigeria, putting an indefinite pause on naira deposits to exchanges.
As a result of such an update, local-based crypto exchanges started experiencing liquidity challenges in processing local transactions, as they were virtually cut off from Nigeria’s financial ecosystem triggering a big gap between the Bitcoin price in Nigeria and that across global exchanges.
The recent CBN directive has already strengthened fears among a growing number of Nigerian users that include millennials and small business operators that use such digital assets for payments and hedge against fiat inflation.
Nigeria’s highly young population (data retrieved from the CIA factbook show more than 90% of Nigerian citizens are within the age of 0-54), coupled with its fast-rising internet adoption and smartphone penetration, had provided the synergy for many young Nigerians to stay atop with Bitcoin.
Ray Youssef, the co-founder of Paxful in an exclusive interactive session on the Nairametrics Crypto program via Clubhouse buttressed that Nigerians over the years have shown a consistent passion for the world’s most popular crypto asset largely being attributed to the ease it brings when making payments for goods and services.
Recent information reaching Nairametrics, reveals leading crypto exchanges are endlessly working on solutions that will curb the high premium Nigerians pay through such channels, as some of them retool their services to include Peer to Peer trading in the case of Patricia.
Nigerian-based crypto exchange Buycoins, some days ago via Twitter, announced that its customers could buy their bitcoin through a newly designed crypto-asset that bridges the Naira thus offering the advantages of decentralized blockchain.
In addition, the world’s largest crypto exchange, Binance recently rolled out new services to enable compliant bitcoin trading in Nigeria. It features the introduction of a new trading pair (NGN/NGN Fiat) and Express mode.
Bottom line: Leading Crypto pundits are therefore not surprised that Africa’s biggest crypto market is not giving up on bitcoin and thus ready to pay a premium to hold on to the asset, irrespective of the Central Bank’s ban.
The odds in favor of Bitcoin breaking above $100,000 are fast gaining ground, taking to account that rich investors in recent weeks have increased their pace in moving Bitcoin.
These are triggered by the rush which include crypto traders and investors trying to have a stake in this fast-rising crypto asset.
Data obtained from Bitcoin Block Bot, a crypto analytic tracker, revealed that someone moved 14,834 BTC $853 million in block 671,619
Such strong demand on the world’s flagship crypto asset by large entities is keeping it within striking distance of $60,000. At the time of writing this report, Bitcoin traded at $57,048.20 with a daily trading volume of $52,720,140,286. Bitcoin is up 0.97% for the day.
As large entities accumulate BTCs, bitcoin’s circulating supply reduces, and this can weaken any bearish trend bitcoin finds itself in.
- The flagship crypto has gotten more endorsements in recent weeks from blue-chip companies like Mastercard and America’s oldest bank, BNY Mellon, which showed support for Bitcoin. Mastercard had earlier disclosed that it would open up its network to some cryptocurrencies including Bitcoin.
- PayPal and the world’s largest asset fund manager, BlackRock, have also made big moves to support crypto.
- This also means that over time, it’s possible that as the world’s most popular crypto asset approaches its fixed supply of 21 million, the price of BTC will go up, with BTC’s present demand factored in.
Based on prevailing market conditions, Bitcoin now has a market value of $1.063 trillion.
Popular American online financial advisory company, Motley Fool recently disclosed it was investing $5 million in the world’s most popular cryptocurrency in the coming weeks using the firm’s fund.
Motley Fool, popularly known for its stock research, online subscription services with investing recommendations also disclosed it was using the flagship crypto for wealth preservation over the long term, knowing fully well that Bitcoin has gained more than 740% in the last year.
What this means: The financial online subscription-based company also highlighted the major reasons, via Twitter, why it was investing in the fast-becoming safe-haven asset,
“We believe it will store value more effectively than gold over the long term.
“We believe it may become a medium for transactions, as/if pricing stabilizes in the decade ahead.
“We believe it can act as a productive hedge against inflation,” Motley Fool stated.
At the time of writing this report, Bitcoin was trading at $57,639.40 with a daily trading volume of $56.5 Bitcoin. The flagship crypto is up 0.61% for the day.
This comes as no surprise to many crypto pundits, as of late, the flagship crypto has gotten more endorsement in recent weeks from blue-chip companies like Mastercard and America’s oldest bank, BNY Mellon showing support for Bitcoin. Mastercard had earlier disclosed it would open up its network to some cryptocurrencies including Bitcoin.
PayPal and the world’s largest asset fund manager, BlackRock have also made big moves to support crypto.
In addition, Motley Fool further added that it was fully aware of the risk involved holding in the short term, due to its susceptibility to high volatility, as the American financial company planned to invest it in the long term.
Nairametrics
