For the first time in 36 months, Nigeria’s currency plunged to its lowest level against the American dollar. Falling oil prices and poor liquidity in OTC spot and black markets were among the main factors behind the slide in the value of the naira. While the naira falls, Bitcoin continues to rise.
Nigeria recently slid to a three-year low on the black market after the oil market crashed. The Nigerian naira fell to N420 per dollar on the black market for the first time since 2017.
At one point, the naira fell from N420 to N425 on the black market. Sales of the currency by the Central Bank to Bureau de Change dealers were stopped last month in an attempt to control prices. The Central Bank devalued the naira in March. In addition to falling oil prices, the COVID-19 lockdown has also hit the value of the naira as prospects for Nigeria’s economy fall.
Meanwhile, Bitcoin experienced a steady gain, shooting above $7,500 after breaking through key resistance levels. In contrast to currency markets, the “digital gold” has been performing above expectations.
With the halving event on the way, anticipation of higher prices is on the rise. Most analysts believe a price rally will take place, boosting Bitcoin above $20,000. If this occurs, the cryptocurrency will surpass its peak price set in 2017.
Nigeria’s stock markets have also felt the burn of bleak economic times. It recorded its worst losses since the 37% drop of market value in March 2009. It lost market capitalization of N1.87 trillion in Q1,2020. Reports in April revealed that the market managed to recover some losses as market capitalization gained N801 billion.
Meanwhile, Trader Henrik Zeberg reports a bullish pattern for gold,
“This is a massively Bearish pattern. No question about it! Gold can rally higher from here or it can break from here. But there is nothing Bullish about this.”