• Bitcoin Premium is trading at $38,000 in Nigeria due to increased demand for the asset in the country.
• The price of bitcoin (BTC) in Nigeria has significantly increased beyond the global market valuation amid growing demand for the asset among citizens in the West African country.
• The development comes as demand for the leading digital asset has continued to increase in Nigeria due to the government’s decision to impose limits on banks and ATM cash withdrawals in the country.
As the world continues to grapple with the economic challenges brought about by the coronavirus pandemic, Nigeria is increasingly turning to bitcoin as a means of preserving wealth and hedging against inflation. As a result of the growing demand for the asset, the premium for bitcoin in the country has now exceeded 60%, with the price of the asset currently trading at $38,005 on the leading Nigerian cryptocurrency exchange NairaEX.
The surge in demand for bitcoin in Nigeria has been driven by a number of factors. Firstly, the Nigerian government has imposed limits on cash withdrawals from banks and ATMs, making it difficult for citizens to access their money. As a result, many have turned to bitcoin as a more reliable and accessible option for preserving their wealth. In addition, the country has recently seen a surge in inflation, with the consumer price index (CPI) rising to 17.33% in December 2020, the highest level since 2016. This has further boosted demand for bitcoin as a hedge against inflation.
Moreover, the Nigerian economy has been hit hard by the pandemic, with the country’s GDP contracting by 3.62% in the last quarter of 2020, the largest contraction since the first quarter of 2017. This has prompted many to seek alternatives to the traditional banking system, further increasing demand for bitcoin in the country.
The surge in demand for bitcoin in Nigeria has also been aided by the increasing adoption of cryptocurrency by businesses in the country. Businesses in Nigeria are increasingly embracing cryptocurrency as a means of payment and settlement of transactions. This has opened up a new market for bitcoin and other digital assets, and has further contributed to the premium price of bitcoin in the country.
As demand for bitcoin in Nigeria continues to increase, it is likely that the premium price of the asset in the country will remain high in the short term. However, the long-term future of bitcoin in the country will depend on the government’s stance towards cryptocurrency and its ability to regulate the sector effectively.