Over the past few years, Nigerians have embraced cryptocurrencies. The local population has an increasing interest in digital coins. Today, no other country uses Bitcoin as actively as Nigeria. According to Google Trends, the largest number of search queries for Bitcoin in 2019 came from Lagos. Here is an overview of the trends.
This year, Arcade Research has rated the country fifth in its global rating, estimating that 11% of connected Nigerians owned or used cryptocurrencies. Recent statistics reveal Nigerians’ passion for both Bitcoin and altcoins. Today, local traders are among the greatest users of cryptocurrencies worldwide.
Current Statistics
In early 2020, the overall trading volume of Bitcoin around the world was estimated to be around $46 billion. At its peak in March, the figure reached $115 billion. In Nigeria, the volume of transactions was roughly $1.3 million (498 million Naira). The top three most popular coins include Bitcoin, Litecoin & Ethereum. The local population uses cryptocurrencies for the following purposes:
- transfers,
- banking,
- fintech, and
- investment
Technology
Despite wide media coverage, cryptocurrencies are not as widely known as conventional systems. According to the latest study by FXTM, just over 60% of respondents were familiar with the system. However, the profit potential in trading is immense.
According to cryptocurrency statistics that have been recently provided, Bitcoin remains the world’s number one cryptocoin. Every month, search engines receive around 5 million queries for the keyword. For their search, experts used the Keyword Finder technology. Other choices (accounting for a third of all searches) include XRP (Ripple), Litecoin, Ethereum, and Bitcoin Cash.
Bitcoin has been around since 2008 and it is well-known for its high volatility. This means traders may benefit from short-term trends on the market. Cryptocurrencies can be traded directly or indirectly – through derivatives. Local governments across the world are developing ways to regulate the circulation of digital coins. Today, controls vary from country to country.
Drivers of the Rise
The country’s development has been slow. Nigeria is grappling with multiple challenges, both social and economic. Almost half of its population (87 million out of 200 million) live in extreme poverty. In 2019, the inflation rate reached 12%.
Nigerians, as well as residents of South Africa, are seeking convenient ways to earn and send money remotely, which is why cryptocurrency use is on the rise. This also explains the appeal of Forex and other trading instruments.
Instability of African Currencies
Uncertainty surrounding the future of local currencies is a major driver. As African countries are prone to hyperinflation, their money systems are highly volatile. In order to protect their savings, consumers turn to digital coins, which are widely recognized around the world. Investment in cryptocurrencies is perceived as a prudent step.
Cheap Transfers
The primary driver of the growth is the affordability of payments. The use of cryptocurrencies allows Nigerians to circumvent complicated and bureaucratic transfer systems. As many of them use payments on a daily basis, Bitcoin is an appealing option.
Through crypto systems, individuals and businesses may send and receive transfers across country borders. It is possible to pay suppliers, send help to family members, or do shopping. The fees are significantly lower than charges for conventional services.
For instance, through the Paychant payment processor, businesses can accept payments in digital coins – Bitcoin and Etherium. These are instantly converted to Naira, which offers protection against volatility. It is also possible for merchants to receive direct payments through the Bitcoin Cash Register app.
Tightening of Controls
A few years ago, the central Bank of Nigeria advised citizens against transactions in Bitcoin. All commercial banks were warned against assisting cryptocurrency trading. However, Nigerians’ passion for digital coins has not ceased. Today, Bitcoin is still legal in the country, although authorities view it as a risky asset.
Another Way to Trade
In Nigeria, individuals may openly trade Bitcoin through CFDs (Contracts for Difference). These instruments are accessible through the most popular trading platforms. Global brokerages provide these instruments along with many others, such as currency pairs, stocks, CFDs on commodities, and more.
Any CFD is an instrument linked to the underlying asset (e.g., Bitcoin). The trader does not need to own it. Instead, they speculate on the value. These virtual derivatives allow Nigerians to profit from price dynamics for a wide range of tools, from crude oil to Etherium.
Final Say
The growth of cryptocurrency use in Nigeria has been spectacular. Despite disapproval by the central bank, merchants and consumers see Bitcoin and altcoins as means of cheaper and more convenient transactions. Traded directly or through derivatives, cryptocurrencies bring undeniable benefits to financially savvy residents.