Nigeria is the second biggest market for Bitcoin after the United States. Digital currency is popular in the region due to uncertainty around fiat money, weak banking system, and non-availability of traditional online payment systems such as PayPal.
60,215 BTC over Last Five Years
According to the data provided by Paxful, 60,215 Bitcoin have been traded over the last five years. 60,125 BTC accounts for nearly $566 million, which is the highest regional volume recorded over the peer-to-peer platform after the US. In 2020, the traded volume has broken previous yearly records after rising by 30%. According to Paxful, the company has witnessed a 137% surge in “new registrations” in the country.
Coin Dance’s data reveals that almost 20,504 BTC have been traded this year, which is the highest amount recorded over the last years. From 2015 to the current year, the volume has jumped by at least 19%.
The peer-to-peer firm has registered new 1.3 million accounts successfully. Nena Nwachukwu, regional manager of Paxful, said that crypto-inspired local residents prefer peer-to-peer as well as arbitrage trading. People in Nigeria like the digital currency because BTC transfers are “much cheaper and faster than using traditional money transfer operators.”
The main catalysts behind driving crypto high are the weak fiat currency, naira, and disturbed banking infrastructure in the region.
There are other fundamental factors as well which have a role in introducing Bitcoin to the citizens of Nigeria. PayPal is not providing its services in the country like many other online payment companies. On international transactions and transfers, local banks charge very high commissions due to a lack of the reserve currency US dollar. Eleanya Eke, the co-founder of Buycoins Africa, said:
“People want to be able to buy and sell, transact internationally and the more the traditional channels are being restricted the more people trade crypto and mainly bitcoin.”
He further explained that no one can stop the trading of the flagship currency as it can shift to peer-to-peer trading in case of exchange blockage.
In order to understand how Bitcoin works, Nigerians have made certain initiatives to launch platforms educating people about cryptocurrency. Currently, there are a lot of companies that are offering crypto services to residents. These crypto companies include the largest exchange Binance, peer-to-peer marketplace Paxful, Luno, and locally-based firms, including BuyCoins, Quidax, and Busha.
Prominent tech investor Osaretin Victor Asemota claimed that people are now moving from physical transactions toward online.