West African giant Nigeria has won laurel for itself according to recent data from Google Trend, which says that Nigeria is the only country with so much interest in Bitcoin. Reports from other sources indicate that Nigerians have traded up to $218 million in Bitcoin just in the last 6 months.
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Kenya and Ghana trailed behind Nigeria with each claiming $90 million and $68 million to their credit as transaction volume amassed from Bitcoin trading. Nigeria braved all odds including a ban on crypto activities from the Central Bank of Nigeria (CBN), to find itself at the top of the pecking order.
In these three countries, local crypto exchanges such as Paxful and Localbitcoins accounted for most of the transactions signifying a rise in P2P trading in the continent. While the data on P2P trading in Nigeria is significant and shows immense growth, the volume is higher if the trading data on centralized exchanges are factored in.
Some months ago, Paxful stated that Nigeria was its most important market given that it accounts for 1.5 million users on its platform. A report from on-chain analytics firm, Chainalysis assessing the growth of Africa’s crypto market showed that the continent had witnessed a growth of 1200% between 2020 and 2021.
In the same report, Chainalysis acknowledged that Nigeria was leading the pace of the growth, although Chainalysis did not state exactly what was responsible for the growth, it is not difficult to see that the growing interest in alternative classes among the youth population stemming from a plethora of factors is the reason.
The country’s inflation and currency devaluation is spurring this fast-paced adoption. Moreover, the population of Nigerians within the age range of the tech-savvy is quite large.
Other factors include the difficulty experienced in receiving remittances from outside Nigeria. The average Nigerian is faced with a myriad of challenges that traditional payment channels have been unable to address.
PayPal is out of the question since Nigerians are barred from receiving payments through the plans. MoneyGram and Western Union might be options, however, the process is often slow and expensive.
Meanwhile, Bitcoin and other cryptocurrencies water down these challenges owing to their borderless nature and low-cost incentive. Following the recent trends, Paxful has decided to latch on to the opportunity by integrating Bitcoin’s Lightning Network into its platform. This will make Bitcoin payments super fast and super low in terms of cost.
Nigeria has cemented its status as a leader in the fintech industry with several firms and startups emerging from the Nigerian market daily. While the interest in Bitcoin continues to grow among the Nigerian population including the old, transaction volume will increase as well, irrespective of the restrictions placed on crypto trading by financial authorities in the country.