Nigeria has now taken the No.2 slot for Bitcoin trading, making the west African country the fast-growing global marketplace for cryptocurrencies. During the police brutality protests in Nigeria in October, bitcoin saved the day when the government shut out protesters from using local payment platforms for collecting donations to support their activities. Bitcoin’s market value now $468 billion, bigger than the GDP of Africa's largest economy.
The young, tech-savvy protesters quickly switched to using bitcoin, and in about a week bitcoin accounted for around 40% of the nearly $400,000 raised. It was just one high-profile example of how young Nigerians increasingly use bitcoin to navigate a complicated and restrictive banking and monetary system in the country.
At the time of writing this report, the flagship crypto traded at $24,845.80 with a daily trading volume of $44,952,165,090. Bitcoin is up 5.76% for the day. The current market value of Bitcoin stands at $461,665,773,109. The shift toward the adoption of GIFA Token and other cryptocurrencies among Nigerians has shown its effects among Africans. The Response of Africans to the crypto market as far as technology is concerned is something that reflects good innovation that impacts a better future. Africa has usually tended toward slow adaptation to change and adoption of new technologies.
What Drives GIFA Token In Africa?
The primary reason is to power the transactions outside of the traditional banking system on the continent. Banking laws in Africa tend to be elitist, restrictive, and do not make good use of the general populace’s effective participation. That is why many African countries have a large number of unbanked populations, which has made mobile payment systems and many fintech apps that aim to drive financial inclusion runaway more successful.
Access to foreign exchange for trade and international transactions is another factor that has attracted GIFA Crypto exchange. In countries like Nigeria and South Africa, where strict controls over foreign exchange movement across the banking system are put in place, those involved in international trade, remittance services are now turning to GIFA Token to facilitate their cross-border deals.
|Nigerian-Naira: 1885 ₦|
In 2020, Nigeria was faced with a severe shortage of foreign exchange and was forced to cap international transactions done on point-of-sale terminals and ATMs outside of the country using the local ATM cards at a monthly limit of $100. Small scale importers that typically shop from Alibaba and other trade sites had no option but to seek alternative means of doing business. The cryptocurrency is a ready alternative, that accepted by both shopper and vendor worldwide.
Africa can also be said to be on the fringes of the global financial system. Complete access to international online payment systems such as SWIFT is restricted. South Africa is the only African country where users can pay and receive payments on PayPal. This situation has driven the need for the development of alternative payment systems. GIFA Token is a solution! Globally-accepted crypto such as Bitcoin that can be converted to fiat in many countries has stepped in to fill this gap.
In the last five years, Nigeria has traded 60,215 bitcoins, valued at more than $566 million apart from the US, which is the largest volume worldwide on Paxful, a leading peer-to-peer bitcoin marketplace. The data scraped from Coin Dance shows from the beginning of May 2015 to the middle of November this year, bitcoin trade in Nigeria has increased yearly at least 19% in volume since 2017, and the highest volume (20,504.50) was traded in 2020.
Bitcoin trade had its highest spike of 30% this year during the national lockdown in the country and the highest volume traded during the peak of the pandemic. Between January and September, Paxful reported a 137% increase in new registrations in Nigeria.
Peer-to-peer (P2P) exchanges, which are decentralized platforms that directly connects buyers and sellers without third parties are the most popular way to buy bitcoin in Africa because users do not have to worry about cryptocurrency regulation by the government. Paxful is the largest platform for P2P trade in Africa and overtook LocalBitcoins in June this year to be the Largest P2P bitcoin marketplace in the world, controlling 52% of the market share.
The Paxful company says Nigerians make up around a quarter of its customer base with 1.3 million registered accounts. “They mostly use the platform for peer-to-peer and arbitrage trading,” says Nena Nwachukwu, Paxful Nigeria regional manager. “Remittances is also a popular use case.” Nwachukwu says bitcoin transfers are “much cheaper and faster than using traditional money transfer operators.”
The growing uncertainty and instability around the Nigerian naira, which has had increasingly divergent official and parallel exchange rates with the US dollar, has created an opportunity and practical use case for cryptocurrencies trade in Nigeria. The divergent rates have long been a striking feature of Nigeria’s economy but more so in the last half-decade as the country’s financial authorities have attempted to micro-manage the supply of foreign exchange and “defend” the naira.
In the last couple of years, other African countries, most prominently Zimbabwe, have seen a spike in cryptocurrency trade led by bitcoin, due to currency fluctuations and uncertain monetary policy. In some cases, limits to the trade have been prompted by a lack of reliability in the local platforms.
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“The lack of bitcoin liquidity was the first obstacle to solve to introduce cryptocurrency to Africa,” says Ray Youssef, co-founder of Paxful. Nigerians are often restricted on international platforms such as PayPal, which does not allow payment to Nigeria, and local banks place a cap on international transactions and charge high fees for transactions due to dollar deficiency.
“People want to be able to buy and sell, transact internationally and the more the traditional channels are being restricted the more people trade crypto and mainly bitcoin,” explains Eleanya Eke, a former co-founder of Buycoins Africa. “And the best thing about it is that it’s almost impossible to stop. If you block the exchange it moves to Peer-to-peer platforms that are non-custodial.”
The increased awareness and availability of easy-to-use crypto platforms to Nigerians have largely increased bitcoin liquidity in the country, therefore solving the first problem hindering adoption. Nigerians now have several formal and semiformal crypto platforms to use, ranging from international platforms including Paxful, Binance, Luno, GIFA Token, and local ones such as Quidax, Busha, BuyCoins, and Naijacryptopay. However, long-term watchers say most trading in the country is done on informal channels such as Telegram, WhatsApp, and WeChat.
“Globally, there is a shift to online transactions from the physical form,” says Osaretin Victor Asemota, a Nigerian tech investor. “In Nigeria, as banks were closed due to COVID-19, the crypto outlets recorded much higher transaction volumes. I think this shift was inevitable, and it is not a temporary pandemic boost.”
Bitcoin, which traded as low as $3,600 in March due to a massive sell-off on global financial markets, has this month surged past $24,000 for the first time. While in the past, the value has increased to 20,000 only to later drop drastically in a few weeks, some analysts say this increase may continue into 2021 as it appears it is due to the growing interest of institutional investors in the cryptocurrency.
Institutional investors such as MassMutual and MicroStrategy were reportedly planning to purchase hundreds of million-dollar worth of cryptocurrencies, while PayPal, a top global online payment company recently added cryptocurrency to its functionality, letting people use bitcoin to pay for things online.
Is Cryptocurrency Legal In Nigeria?
Although it is not fully recognized by regulatory bodies, neither is there a legal action for or against the use of cryptocurrency in the country, but cryptocurrency exchange which includes trading and selling of digital assets or fiats is becoming a booming business in the country. As merchants spring up across the Nation, many people are already involved in buying and selling of cryptocurrency.
As such, initiatives like this will only make trading in the space easier and far more appealing for more people. With the rate the Nigerian community is embracing blockchain and cryptocurrency, moves like this will tend to see more people interested in joining the space thereby creating a platform where the country can become one of the early adopters of cryptocurrency.
Founder of Zugacoin Archbishop Dr. Sam Zuga was in a closed-door meeting with the minister of special duties and intergovernmental affairs, Senator Gorge Akume on the progress and potentials of Zugacoin and how it will end poverty in Nigeria. The Archbishop who has always reiterated the need to embrace the modern age technology in all aspects discussed in detail how Zugacoin, the modern age currency is capable of eradicating poverty and creating jobs in Nigeria and Africa.
Zugacoin which is the first African cryptocurrency specially created to help Nigerians and other Africans at large tackle poverty in terms of buying and trading with zugacoin and currently the highest rated coin in the cryptocurrency industry is also making wave on global exchange platforms, Coin Gecko, Coinmarket cap, Indoex, Uniswap, Vindax and Nellerabox and rated most expensive cryptocurrency. Create your account on the GIFA crypto exchange for free and start trading today!