Bitcoin (BTC) has seen an exponential increase in demand in Nigeria as the country’s central bank encourages people to switch to digital money. As a result, the price of Bitcoin has skyrocketed massively above world market levels.

The cost of a Bitcoin on the Nigerian Crypto exchange NairaEx It is currently trading at around 17.6 million naira, the Nigerian currency, equivalent to US$38,200. This represents an increase of almost 60% compared to Bitcoin’s current price of $23,150 at the time of writing.

Nigeria bets on the adoption of Bitcoin and digital assets

The Bitcoin bomb on this Nigerian cryptocurrency exchange comes after the country’s central bank began limiting over-the-counter (OTC) cash withdrawals by individuals and corporate organizations per week.

This withdrawal limit policy only allows Nigerians to withdraw a maximum of 20,000 Naira (NGN), worth approximately $43, from ATMs in the country per day, and with a limit of 100,000 NGN, worth approximately of $217.

He published letter in December 2022, in which the Central Bank of Nigeria redesigned its policy regarding the cash withdrawal limit, has resulted in a premium being added to the price of Bitcoin in the African country.

This measure is supposedly intended to eliminate money laundering and reduce inflation in the African country, which in the latest Nigerian inflation report was 21.34% in December 2022. It fell slightly from a high of 21.47%.

The Central Bank of Nigeria also gave Nigerians until January 24 to exchange their old, higher-denomination notes for the new currency. This measure caused discomfort in the population; people reported that the deadline was too short, which led to an extension.

Nigeria’s long relationship with crypto assets

The Central Bank of Nigeria has come a long way in adopting digital currencies. In 2021, the Central Bank issued a circular to all financial institutions to stop providing services to cryptocurrency exchanges. He also called for the closure of accounts of individuals and companies that actively use cryptocurrency and trade digital assets.

A few months later, Nigeria planned to pass a law that would recognize Bitcoin and digital assets as investment capital. This industry has generated a lot of interest and alternatives to diversify capital and provide solutions to economic problems in different countries.

This law was implemented after the country’s central bank failed to introduce a Central Bank Digital Currency (CBDC). This digital asset, called e-Naira, was poorly accepted and adopted by the population last year, with an adoption rate of 0.5%.

Nigeria has also been in talks with Binance, the world’s number one cryptocurrency exchange, to develop an economic zone that supports cryptocurrency and blockchain businesses in the region.

BTC price falls on a 4-hour chart Source: BTCUSDT Trading View

Bitcoin has started a correction at press time, falling 4.6% in the last 24 hours. And 0.1% less in the last seven days in global markets. Investors expect tomorrow’s Federal Open Market Committee (FOMC) meeting to have an impact on price action.