With 60,215 Bitcoin worth $566 million traded over the last five years, Nigeria is ranked as the number 2 Bitcoin market in the world. From the beginning of May 2015 to the middle of November 2020, the trade of Bitcoin in Nigeria rose by at least 19% on an annual basis in volume since 2017.
Lockdown events of 2020 played a significant role in the 30% spike in price of Bitcoin in 2020. New registrations across exchanges in Nigeria rose significantly during the period.
“The massive price increase of bitcoin during Christmas is mainly driven by retail traders as traditional markets are closed,” says Marc Bernegger, bitcoin pioneer and member of the Board of Crypto Finance Group
Growing uncertainty and instability of the Nigerian Naira threatens the savings and economic prospects of millions of households across the nation. The Naira experienced increasingly divergent official and parallel exchange rates with the U.S. dollar.
According to Tech Investor Osaretin Victor Asemota,
“Globally, there was a shift to online transactions from the physical…In Nigeria, as banks were closed, the agency outlets recorded much higher transaction volumes. I think this shift was inevitable, and it is not a temporary pandemic boost.”
In many areas of the world, cryptocurrency is mainly used by financial traders. In Africa, however, a lot of people use cryptocurrency for commerce. Small businesses and individuals in Nigeria, Kenya, and South Africa account for most of the activity. The average inflation rate in Sub-Saharan Africa amounted to 8.38 percent when compared against the inflation rate of the previous year.
More than ever, Nigerians both young and old are looking to cryptocurrency to elevate them socially and economically. Some believe that the cause of this may stem from the rise in Nigeria’s digital economy which grew by 15.09% in real terms in Q2 2020, far higher than the 9.99% recorded in Q1 2020 and 9.01% in Q2 2019. This was not always the case.