The value of bitcoin increased on Nigerian exchanges due to the lack of market liquidity.
Now that Nigerian banks are unable to receive bitcoin money, their trading becomes difficult.
In Nigeria each bitcoin costs more than $ 98,000, and its price continues to climb uncontrollably. Although this might be the dream of many bitcoiners, the reality is that it has become a nightmare for Nigerian traders. And it is that the rally that the cryptocurrency is having in that nation is the product of nothing more and nothing less than a measure imposed by the government that prohibits the commercialization of digital assets.
To understand the dimensions of this phenomenon, it is illustrative to know that the price of bitcoin in Nigeria is 56% more expensive than the average value of the cryptocurrency globally. While bitcoin has just barely passed $ 57,000 per unit in most countries globally, in Nigeria the price continues to climb toward $ 100,000. That is, a difference of more than $ 40,000 per unit purchased.
The data of this monetary disaster is being recorded by the application BitcoinPriceMap, which monitors the price rises of the asset in different parts of the globe. Likewise, members of the Nigerian crypto community have also confirmed the unusual behavior in the price of bitcoin, explaining that it is the consequences of the recent measures imposed by the national government.
The price of bitcoin in Nigeria is already over $ 90,000 per unit and is scaling rapidly. Source: BitcoinPriceMap.
Chiagozie Iwu, CEO of the Nigerian exchange Naijacrypto, stated in an interview that currently The country’s exchange houses have different prices for bitcoin due to the increase in the acquisition costs of the asset. Iwu explained that now that banks are rejecting cryptocurrency-related deposits and closing bank accounts, there is not enough liquidity in exchanges.
Before the cryptocurrency trading ban imposed by the Central Bank of Nigeria, exchanges kept cash (nairas) in banks and had a steady stream of deposits. “Before there was a unified source of liquidity,” says Chiagozie Iwu, and therefore there was always cash to exchange for bitcoins and the price was stable.
However, after the government decreed that the purchase and sale of bitcoins was prohibited throughout the territory, deposits on exchanges like Naijacrypto decreased by 80%. Also, it is now much more expensive for companies to get cash and carry out transactions, so the price of the asset multiplies.
Could the Nigerian government change its mind on Bitcoin?
Chiagoze Iwu stressed that, little by little, the bitcoin market in Nigeria has been recovering its usual movement. However, marketing is still low compared to a few months ago, reducing up to 20% the amount of deposits received by national exchanges.
Due to this new reality, there is a chance that the price of bitcoin in Nigeria will remain much higher than in other parts of the world. Cryptocurrency has become even scarcer in the territory, and it was the source of income for both entrepreneurs and social activists. And it is that the members of the END SARS movement, against police violence in Nigeria, have used bitcoin to finance their operations in the country, this being the main reason for the prohibition of the cryptocurrency.
The CEO of Naijacrypto believes that there is a possibility that in the future the Nigerian government will revoke the decree against cryptocurrencies and allow trading again. However, this option is hard to believe if we take into account that the state narrative is that bitcoin is a danger to the economy. Recently in CriptoNoticias we reported that the Nigerian senator, Mohammed Musa, accused bitcoin of having turned the national currency into an “almost useless” asset. A speech that strengthens the idea that it is better for bitcoin not to circulate within the country.