Bitcoin is up about 40% so far this year. In fact, as discussed in a recent article, everything is set to record its best January since 2013. In the past seven days, Bitcoin has recorded five green candles. As a result, its value appreciated by ~5% in that time window. At press time on Monday, the largest cryptocurrency was seen consolidating around $23.7k.
On most exchanges, Bitcoin trades at the same value. However, the situation is chalk and cheese when it comes to Nigeria. Several market participants took to social media to stand out that the largest cryptocurrency is trading at a ~60% premium, around $37.2k, in the African nation.
Also Read: Nigerian P2P Bitcoin Volume Hits $400M In H1 2022, Followed By Ghana And Kenya
Factors that influenced the increase in the price of Bitcoin
Nigeria is in the midst of transforming to a cashless economy. The government has been trying to eliminate excess cash in circulation. The Central Bank of Nigeria recently announced that Nigerians will not be able to withdraw more than 20,000 naira [€42 or $44] daily and 500,000 naira weekly from ATMs. The policy went into effect on January 9.
However, from dealing with currency devaluation to recovering from Covid restrictions, Nigeria’s economy has yet to overcome the aftermath of macroshocks. As a result, experts have warned that the timing of the latest policy’s implementation could diminish its effectiveness.
In addition, Nigeria is also phasing out its old currency with newly issued paper. Nigerians have reportedly been waiting in long lines to change their tickets. In addition to curbing corruption, the government has also taken this initiative from the central bank to encourage digital payments.
Therefore, Bitcoin trading at a premium in Nigeria amid its economic turmoil evidently highlights that investors are turning to cryptocurrencies for protection.
In fact, people on Twitter also pointed out that the number of inquiries about “How to buy Bitcoin” recently peaked, thanks to Nigerians.
Furthermore, it seems that the citizens are also exploring the option of Bitcoin mining. African nations have been leading global Google searches on how to mine Bitcoin.
Also read: Bitcoin on track for ‘best’ January in 10 years
Bitcoin and its macro tailwind
Nigeria aside, it looks like Bitcoin is gradually coming out of the woods. After staying out of the “fear” zone for 11 straight days, he is now at his highest point in 1 year. From the lows of early January 25, the reading for the said metric has already risen to 61, highlighting the growing investor confidence.
Despite losing more than half of its value over the past year, the confidence of the masses in Bitcoin has not faded. Current investor sentiment, as highlighted above, and rising demand in Nigeria serve as typical exhibits.
Also read: Bitcoin: Nigeria is considering legalizing the use of cryptocurrencies