Bitcoin price in Nigeria is rising beyond market levels as demand increases. This has been caused in large part by the central bank’s restrictions on cash.

The Bitcoin premium in Nigeria is currently around 64%. The cost of 1 BTC on one of the country’s major exchanges, NairaEx, is 17.2 million naira (NGN). This works out to a whopping $37,378 US dollars. The market value of BTC is currently $22,866.

Also, the price on peer-to-peer markets is even higher, according to some Paxful user reports.

However, it is not the first time that there has been a massive Bitcoin premium in the West African country.

In February 2021, the Central Bank of Nigeria banned regulated financial institutions from providing services to local cryptocurrency exchanges. As a result, the demand for BTC increased, driving the premium up to 35%.

Director of Strategy of the Alex Gladstein Human Rights Foundation explained that the “Nigerian regime applies a false ‘official’ value to the naira of around 450/dollar where the street rate is 750/dollar”. He added:

“Actually, BTC just allows you to get all your money in one cross-border payment to Nigeria. People aren’t actually paying $40K+ in *real dollars* for BTC.”

Nigerian ATM Anarchy: Bitcoin Solves This

The Bitcoin premium has been caused by a run on ATMs due to cash restrictions imposed by the central bank.

Nigerians were only allowed to withdraw a maximum of 20,000 naira, which is around $43.44, from ATMs per day, starting on January 9. Limits were also imposed on cash withdrawals at the teller window and weekly limits on the maximum allowed. Also, new rules were enforced by the central bank when launching new banknotes.

This week, the central bank extended a previously set January 24 deadline for citizens to exchange their old notes for new ones. The new deadline to change tickets is February 10.

The central bank aims to curb money laundering and keep inflation in check, but has instead driven people to Bitcoin.

According to local media reports on January 31, both new and old bills were not available at ATMs or OTC on Monday. A Zenith Bank teller told the outlet: “We have no new naira and we are not paying for old notes.”

The rare ATMs that dispense new notes charge fees on other bank cards and only dispense 1,000 naira ($2.17) per transaction. As a result, there has been carnage at ATMs across the country:

The Central Bank wants a cashless society

Nigeria’s central bank is on a mission to eradicate cash and go fully digital. Its eNaira CBDC, launched in October 2021, has failed to gain traction among Nigerians who prefer cash and cryptocurrencies.

Yet one year after its launch, only 1 in 200 Nigerians were using eNaira.

Nigeria also plans to regulate cryptocurrencies as its central bank failed to contain a blockade it imposed in early 2021.


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