Although Nigerian exchanges are recording such high prices, that does not mean the rest of the world will follow their lead.
Bitcoin prices can vary significantly from country to country. Specific regions are subject to paying premium prices, with China being a great example. But Nigeria is warming up to Bitcoin as well, sending prices soaring to unseen levels. Just yesterday, the price per BTC touched US$1,251.18 across Nigerian Bitcoin exchanges. Considering how the average global price was US$725 at that time, such a large cap is rather unusual.
Bitx is one of Nigeria’s most prominent Bitcoin exchanges to date. The platform attracts traders, consumers, and investors from all over the country. Interestingly enough, Bitx cannot provide ample liquidity to accommodate large trades right now. Due to this low liquidity, the price per individual BTC spiked to over US$1,250 yesterday.
Nigeria Shows An Increasing Demand For Bitcoin
While it is not unusual to see people pay a premium compared to the normal price, a US$500 discrepancy is very uncommon. Nigeria is not the only country paying very high prices for Bitcoin right now, though. Indiasees a similar trend, ever since the government made most of the cash supply useless. However, their premium prices are a lot lower, sitting at “just” 10-20% over the global average.
Different factors influence the sudden demand for Bitcoin. As the naira increases in value against the US Dollar, purchasing power increases as well. Consumers and investors who see more value in their own currency are more eager to spend it. Additionally, they want to hedge against a future volatile downturn by investing in alternative financial assets. Bitcoin is an attractive choice, as it is the best performing asset for several years now.
Another factor to take into account is how Nigeria is home to a lot of Internet users. Recent statisticsindicate the country is the ninth-highest ranking region in the world. This does not automatically mean there is an uptake in digital payments, although the growing demand for Bitcoin proves otherwise.
Although Nigerian exchanges are recording such high prices, that does not mean the rest of the world will follow their lead. Bitcoin enthusiasts would love to see BTC go above US$1,000 once again, but it will not happen overnight. Thriving adoption in India and Nigeria may help to push the global average price up as well, though.