Nigerians go bearish on Bitcoin despite rebound in international markets - BUSINESSDAY
Nigerians are yet to recover their appetite for Bitcoin transactions despite a rebound in cryptocurrency trade in the international markets.
BusinessDay analysis of bitcoin trades in the country shows that the volume of bitcoin transactions has not matched the global resurgence. Local bitcoins data show three weeks consecutive drop in volume of bitcoin traded in the country.
The downward trend in Nigeria is happening despite the global cryptocurrency market regaining lost grounds. The market is up 55 percent to $430 billion after losing 40 percent of its value in February, according to data from the Coinmarketcap. Seventeen of the top 20 cryptocurrencies on the platform are also seeing value appreciation after seven days of bearish trading.
This is unlike Nigerian where bitcoin volumes that rose in the second week of January to N1.817 billion, started to decline in the third and fourth weeks at N1.763 billion and N1.505 billion, respectively. The decline continued in the first week of February to N1.439 billion. This implies a N432 billion drop in volumes traded in three weeks.
Naira Exchange (Nairaex) and Tanjalo.com, two exchanges that operate in Nigeria, confirmed to BusinessDay that the slide in volume has affected activities on their various platforms.
Tim Akinbo, founder of Tanjalo.com, told BusinessDay that the decline in volumes started since December, which coincides with the period of high volatility in the cryptocurrency markets globally.
Bitcoin (BTC), the largest cryptocurrency by volume, has seen significant price appreciation globally in the last one week on various exchanges. It hit a high of $9,069.27 on Tuesday, February 6, only to drop back to $8,348 on Friday morning, February 9, on the Coindesk Bitcoin Price Index. On the Bitfinex, it exchanged for $8,281 at 3:00pm Nigerian time. At the same period it was trading for $8,278.03 on the Bitstamp platform, and $8,259.04 on the Gemini exchange.
As at time of writing this article on Monday morning February 12, the price of bitcoin has reached $8,801.16, representing a 1.69 percent increase within one hour. Ethereum also saw a rise to $869.90 on the Coinmarketcap data.
The market capitalisation for bitcoin inched up to $147 billion on Monday,
February 12, from $106 billion the previous Monday.
Last week, an analyst had predicted that the price of bitcoin was going to hit $50,000 by December.
Interestingly, a Twitter poll conducted by Vinny Lingham, CEO of Civic Key, a blockchain technology firm, asking respondents whether they see the virtual currency hitting $50,000 this year, had 61 percent of respondents say ‘Yes,’ while 39 percent said ‘No.’ The poll received 6,166 votes.
“Remarks of Chairman J. Christopher at the recent US Senate
Cryptocurrency hearing was received positively by the crypto community, which helped ease the regulatory fears and stabilise the market above $8,000,” analysts at Naira Exchange, a cryptocurrency exchange in Nigeria, told BusinessDay.
Bitcoin cash (BCH), an offshoot of bitcoin, has appreciated by 25 percent at $1,320.50 in the last 24 hours.
Ripple has also seen total market capitalisation surging to $42.291 billion, representing nearly 41 percent increase from $0.83 to $1.08 as at 2:00pm on Monday morning.
“As always, it is impossible to predict that actual reasons why traders make the decision they make in the market; however, I would assume that value investors think the short term bear trend is over and are taking positions to take advantage of a possible bull run,” Akinbo told BusinessDay.