Nigeria is Africa’s biggest bitcoin trading country ― Analysis

Nigeria is the biggest bitcoin trading country in Africa, according to an analysis by bitcoin trading platform, Paxful’s database.

The analysis, which spanned between May 1, 2015 and November 14, 2020, showed that bitcoins worth more than $566m were traded between 2015 and 2020 in Nigeria, making the country the biggest bitcoin trader in Africa and the second biggest bitcoin nation in the world, trailing the United States, which traded bitcoins worth $3,755,463,837.

According to the analysis, Nigeria traded 10 times more bitcoins than Kenya, the African country with the second-most traded bitcoins.

The analysis states that despite COVID-19 pandemic and the attendant lockdown, with bitcoin trade worth $213,719,383, 2020 saw more bitcoin trading in Nigeria than ever before.

According to the analysis, “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). Nigeria saw its highest increase of traded bitcoins during the lockdown months, with 30.8 per cent more bitcoins being traded in May than in April. August witnessed the highest volume of USD trading ($30m). The volume of bitcoins and USD has decreased since August, with October being the month with the least total trades of bitcoins since January.”

However, despite the slide witnessed between August and October, 2020 witnessed more bitcoin trading in Nigeria than any preceding year as the bitcoin trading industry in Nigeria was worth $213,719,383 in the current year, marking a 102 per cent increase over 2019 trading.

Commenting on the rise of bitcoin demand in Nigeria, Ray Yussef, CEO and co-founder of Paxful, said “Nigeria, Africa’s largest economy, 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. Paxful enabled Nigerians to make use of an asset class (gift cards), as a way to go around financial restrictions. Now, bitcoin is flooding out of Nigeria and into other African countries because of the ambition of Nigerians’ bitcoin community and Paxful.”

On why so much bitcoin was traded during the COVID-19 recession, Brian McCabe, Head of Market Insights of Paxful, attributed it to the economic meltdown occasioned by COVID-19 which compelled people to look for financial alternatives “and saw crypto as an alternative.”

He added: “There is also an analysis that there is the potential for economic pain in countries with USD denominated debt, especially emerging economies. Nearly all emerging market currencies have seen big losses vs the US dollar recently. Countries such as Argentina who can only borrow in USD will need to repay more as their own currencies lose value to the dollar. Most of Argentina’s debt is denominated in USD.

“The problem for them is if the coronavirus continues to weaken their currencies and make the USD stronger, the money will continue to flow out of these economies and their relative debt will increase. If emerging currencies continue to experience pressure, bitcoin could once again become the alternative if people are unable to preserve wealth in their own currency.”

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