A ban in the mud

Despite Staunch Ban, Nigeria Is The World’s Most Crypto-Obsessed Nation

By  |  August 16, 2022

In Africa’s largest economy and most populated country, the trade of cryptocurrency via legacy financial rails has been outlawed for more than a year without any sign of reconsideration. Yet, the West African country has found a way to become the most crypt-curious nation across the world. 

Since April when the crypto market started witnessing a deceleration of value, Nigeria, according to a new study, has developed a lot more interest in the trade of digital assets. 

The report, compiled by CoinGecko, examined Google Trends results for six queries, such as “invest in cryptocurrency” and “purchase cryptocurrency”, showing that Nigeria scored (371) higher than countries such as Singapore and the United Arab Emirates. 

Reflecting increased interest, Nigerians are most likely to buy the dip, in an attempt to hedge against the severe macroeconomic conditions now decimating livelihoods in the country. For the past several months, the Naira has been hemorrhaging value against the dollar, making it one of the world’s worst-performing currencies. 

Nigeria’s obsession with digital assets is also buoyed by the lack of financial services in the country, as despite the proliferation of fintech, there is a huge unbanked adult population. Almost 52 percent [equivalent to 17.36 million people] of Nigerian crypto investors have invested more than half of their assets in crypto.

Per an October 2021 report by Finder Cryptocurrency Adoption Index, Nigeria has the largest percentage of Bitcoin owners in the world. However, Ethereum is fast becoming the most preferred crypto asset in the face of the market’s downturn. 

Cryptocurrencies were taken off Nigeria’s financial tables in October 2021, and ever since the country’s inhabitants have sought other ways to invest in these digital assets. This, rather interestingly, has somewhat turned the market’s mechanism on its head. 

“When the circular was introduced, crypto exchanges were prevented from working with financial institutions, and as a result, they could no longer process deposits and withdrawals in Naira, effectively removing local currency on and off-ramps, Owen Odia, Country Manager for the Nigerian operations of Luno, told WeeTracker in a March exclusive

“This essentially broke the arbitrage loop and removed the correlation that existed between exchanges, which now means they operate completely independently of one another and has led to crypto prices differing significantly across various platforms,” Odia explained. 

The Nigerian economic system is currently in a state of imbalance, and the quagmire is affecting the livelihoods of the everyday person. From university students at home due to a national academic strike to youths without any form of employment and to underemployed citizens, crypto investments have increasingly become a way to survive the unrelentingly harsh realities. 

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