The global price of Bitcoin, the most successful cryptocurrency, fell 65.29% in 2022.
This came as digital currency adoption fell in a year rocked by crypto scandals, with the fall of FTX dominating the airwaves. According to data from coinmarketcap.com, the price of BTC fell from $47,686.81 on January 1, 2022 to $16,547.50 on December 31, 2022.
This is because the market capitalization of BTC fell 64.69%, from $902.1 billion at the beginning of 2022 to $318.52 billion at the end of 2022. After reaching all-time highs during the pandemic, and many analysts suggested set to reach $100,000, the price of BTC took a beating in 2022.
According to Chainalysis, a blockchain insight firm, the global adoption of BTC and other cryptocurrencies has leveled off after growing steadily since mid-2019. It stated that global crypto adoption reached its current all-time high in the second quarter of 2021.
Despite this drop, emerging markets like Nigeria continue to dominate cryptocurrency adoption. In its ‘Cryptocurrency Geography Report 2022’, Chainalysis explained: “A trend we noticed last year has only strengthened this year: emerging markets dominate the index.”
He added: “Ten are lower-middle income: Vietnam, Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya and Indonesia. Eight are upper-middle income: Brazil, Thailand, Russia, China, Turkey, Argentina, Colombia, and Ecuador. Two are high-income: the United States and the United Kingdom.
According to the firm, the reason for this dominance is that cryptocurrency users in countries like Nigeria use cryptocurrency to send remittances, preserve their savings in times of fiat currency volatility, and meet other financial needs unique to their economies.
Despite this drop in market value, investment in BTC by Nigerians grew by five percent in 2022 according to a the punch report. Paxful, a leading peer-to-peer crypto company, said: “Nigeria is our largest country based on trade volume.
“The volume of operations in the country grew more than 5% year-on-year from January to September (looking at the data of 2022/2021).”
The firm’s data also confirmed that the nation’s BTC trade had reached around N171.50bn ($400m) from January to June 2022.
Nigerians’ investment in Bitcoin grew more than five percent in 2022. In a previous report, the punch had reported that BTC traders were regretting their losses due to the drop in the BTC price.
One trader, who asked not to be named, said: “I’ve been in cryptocurrency for a while. In the last few weeks, say eight weeks, if someone tells you that he hasn’t lost money, he’s lying.
“Losing is part of this. On a personal level, and with my signature, we have lost around N40m, this is being conservative. We are big merchants. I won’t call it a loss though, because as long as you’re still in the market, you’ll still get your money back. But on a temporary level, if we close our position now, we would be losing nothing less than that amount.
While BTC price has rallied to $17,348.36 as of 5:15pm Nigerian time on Wednesday, a sense of impending doom lingers.
A financial expert, Kalu Aja, on Twitter recently (Tuesday 10, 2022) called on cryptocurrency users to withdraw their assets. He tweeted: “If you have crypto assets staked, it will be wise to withdraw them. Yes retire.”