Why is Bitcoin (BTC) trading at $37,000 in Nigeria?

Pourquoi le Bitcoin (BTC) s’échange-t-il à 37 000 dollars au Nigeria ?

In Nigeria, Bitcoin trades at the equivalent of about $37,000. Although this represents a premium of almost 38% compared to its “official” price, let’s try to understand how this is possible.

Bitcoin at $37,000 in Nigeria

If for most cryptocurrency investors, Bitcoin (BTC) is currently shipping around $23,100, it is very different in Nigeria. And for good reason, if we rely on platforms like Paxful or NairaEx, it trades at a price of just over 17 million naira (NGN) according to the sources, ie about $37,000. This shows so almost a 38% premium compared to the “world” price of BTC.

First, it is necessary to specify how such a correlation could occur. It is indeed more difficult for Nigerians access to the liquidity of major global exchanges such as Binance in particular. In fact, it appears that this platform can only be used locally for its peer services.

Furthermore, if Nigerians find it difficult to access global markets, forcing them to look at local markets, it is also more difficult for international players to trade in the Nigerian markets. This therefore means that if de-correlation occurs, arbitrage opportunities are more difficult to seize than they would be between Kraken and Coinbase for example, which makes these price differences possible to survive.

👉 To go further – Get our guide to buying Bitcoin (BTC)

The platform to simplify trading

Buy crypto in minutes

Why are Nigerians turning to Bitcoin?

The Central Bank of Nigeria (CBN) is pursuing a policy to digitize its economy. Let’s remember that with 219 million inhabitants in 2022, Nigeria is the most populous country in Africa and the seventh to sixth most populous country in the world.

Moreover, the CBN imposed withdrawal limits on December 6. Hence, ATM withdrawals are capped at 20,000 and 100,000 NGN on a daily and weekly basis respectively. At the current exchange rate, this equates to 43 and 217 dollars.

In addition, the Central Bank has changed its banknotes and the inhabitants of the country have until next February 10 to exchange their old banknotes for new ones. Add to this the consumer price index (CPI) of the country it has posted a very high inflation rate of 21.34% for December 2022.

All these elements are then many arguments in favor of cryptocurrencies, which allows you to hold your money and at the same time, a central bank can fail in its mission.

👉 Also in the news – Why did Bitcoin (BTC) mining difficulty hit a new all-time high?

Cryptoast launches its 1st collection of NFTs

NFTs related to collector’s paper journal 🔥

toaster icon

👉 Listen to this article and all other crypto news on Spotify

Sources: Trade Economics; Paxfull, CBN

Newsletter 🍞

Get a summary of crypto news every Monday by email 👌

What you need to know about affiliate links. This page presents assets, products or services related to investments. Some links in this article are affiliates. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no influence on you and you can even get a bonus by using our links.

Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be responsible, directly or indirectly, for any damage or loss incurred after the use of a product or service highlighted in this article on him. Investments involving crypto-assets are inherently risky, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.

AMF recommendations. There is no guaranteed high return, high risk is associated with a product with high return potential. This risk must be in line with your project, your investment horizon and your ability to lose some of these savings. Do not invest unless you are prepared to lose all or part of your capital.

To go further, read our Financial Status, Media Transparency and Legal Notices pages.

Deka Bank follows the trend: Bitcoin and crypto products available to bank customers

Deka Bank follows the trend: Bitcoin and crypto products available to bank customers

Ethereum Price Prediction: ETH up more than 31% - can the cryptocurrency still reach $10,000 in 2023?

Ethereum Price Prediction: ETH up more than 31% – can the cryptocurrency still reach $10,000 in 2023?