Nigerians run to crypto amid falling naira, Bitcoin P2P trading surge by 258% in 7 days

Nigerians view crypto as a lifeboat by amassing crypto currency

By Olumide Adesina

Bitcoin on dollars

Many Nigerians are hedging against collapsing local currency by amassing dollar-denominated digital assets, in particular stablecoins and bitcoins, thereby causing the fiat local currency (naira) to plunge to a record low in the black market.

According to recent data, Nigerians traded over $5 million worth of Bitcoin on the popular P2P trading website Paxful, and LocalBitcoins saw a 258% increase from last week’s data.

Many Nigerians nonetheless exchange the digital currency in the peer-to-peer market where transactions are priced in dollars, despite the fact that banks are forbidden by the central bank from aiding cryptocurrency transactions.

In addition, information gathered from foreign exchange dealers in various areas of Lagos, the country’s commercial centre, revealed that the Naira was exchanged for the dollar on Wednesday at a rate above N710 to the dollar, while the hard currency was purchased from holders at a rate between N695 and N700 to the dollar.

Also escalating market volatility in the shadow market is the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele’s recent comments at the recently concluded MPC meeting, thus increasing the number of Nigerians panicking and selling their Naira investments for dollars.

In a time of limited liquidity brought on by mounting unease and demand for stablecoins as a shelter currency, the Nigerian naira set a new record.

Since July, the naira has been falling to new lows on the black market due to a lack of dollar availability as the central bank works to encourage trade through authorized exchange channels.

As the election campaign draws near and inflation threatens to devalue the Naira, an increasing number of Nigerians are likewise attempting to be cautious.

Nigeria has several different exchange rates, but one of them is the official rate, which is closely regulated by the Central Bank of Nigeria. There is also an unofficial black market, where prices are more fairly reflective of the value of the naira because they are mostly based on supply and demand, but are highly manipulative due to low trading volumes and its opaque nature.

Nairametrics

NIGERIANS RUSH TO BUY BITCOIN AMID ECONOMY COLLAPSE (REPORT)

Nigerians Rush to Buy Bitcoin Amid Economy Collapse (Report)

By Dimitar Dzhondzhorov

Bitcoin and stablecoins seem to be the solution for many Nigerians who want to protect their wealth due to the crashing naira.

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The crash of Nigeria’s national currency (naira) reportedly pushed many residents to turn to alternative assets such as bitcoin and stablecoins to preserve their wealth. The peer-to-peer exchange LocalBitcoins marked a 258% increase in BTC purchases compared to last week’s figures.

Nigerians View Crypto as a Lifeboat

Nigeria’s official currency – the naira – is the latest experiencing tough times because of the global economic turbulence. In a matter of a month, it tumbled significantly against the US dollar, which spread concerns among the population.

The panic multiplied when Godwin Emefiele – Governor of the Central Bank of Nigeria – warned bank clients, high-profile individuals, and politicians to refrain from withdrawing naira to convert it into the greenback. He said that a relevant surveillance system will track whether such illegal transactions are committed and will punish those who do not abide by the rules.

The confusion in one of Africa’s leading economies prompted many Nigerians to search for investment options that could serve as a hedge against inflation. In particular, they focused on bitcoin and stablecoins.

The popular P2P trading platform – Paxful – confirmed that citizens of Nigeria have displayed a growing appetite for crypto during the first half of the year:

“Narrowing in on Nigeria, trade volume was over $760M last year, and Nigerian users have climbed over the two million mark. And despite the global financial crisis, Paxful is seeing that peer-to-peer and interest in bitcoin is not slowing down. In the first half of 2022, trade volume in Nigeria reached nearly $400M, showing us that the emerging markets are still hungry for bitcoin.”

The digital asset exchange – LocalBitcoins – also recorded a significant surge of interest in the primary cryptocurrency. Latest data showed a 258% increase compared to the previous week’s numbers.

Turks and Argentines Turned to Crypto, too

The economic condition of Turkey, specifically the galloping inflation and its devaluating national currency, became a reason for many Turks to convert their funds into Bitcoin and Tether. It was considered a surprise why locals displayed such interest in those digital assets since gold has been their favorite choice for years.

Not long ago, though, the government urged people to bring their “under-the-mattress” precious metal into the banking system and thus support the falling financial network.

Argentina is another country that battles monetary distress and political chaos. At the beginning of July, the Minister of Economy – Martin Guzman – resigned from his post, which inflicted more panic among the locals.

Somewhat expectedly to the crisis, many Argentines shifted their focus to crypto. According to data from CryptoYa, Binance, and Lemon Cash, the most purchased tokens turned to be stablecoins pegged to the US dollar, including Tether.

Dimitar Dzhondzhorov

Dimitar got interested in cryptocurrencies back in 2018 amid the prolonged bear market. His biggest passion in the field is Bitcoin and he was fascinated with its journey. With a flair for producing high-quality content, he started covering the cryptocurrency space in late 2018.

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