What's happening to the price of bitcoin in Nigeria?

LeoFinance
15 days ago
4 Min Read
707 Words

All of us at Leo financie can share a common sentiment of seeing how cryptocurrencies are reaching the moon, hitting record highs even better than in 2017.

I read a post recently from @jondoe where he mentioned that the price of bitcoin would inevitably reach $1 million, And how I commented to Jon in his post, I think maybe if the price keeps doubling month after month by next year in June "maybe" that price will be achieved due to more and more people, financial institutions and companies are looking at cryptocurrencies and especially bitcoin as a safe harbor against inflation and these decisions are reaping them a lot of success, just look at how much tesla has earned with the investment of 1. 5 billion probably more than 500 million dollars with the new ATH that bitcoin has had. But be that as it may we are all very happy with the excellent news of the bitcoin price and the fact that it continues to rise as it is doing.

But unlike us, for Nigerians a bitcoin with an accelerating price rise is not good news. For example, if we look at what is happening right now in Nigeria with the cryptocurrency bans in their territory and the crisis that this is generating, we can know why it is not good news that the price is rising.

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Bitcoin price map

In an article I wrote 1 week ago I mentioned the situation that is happening in Nigeria and raises the question whether banning cryptocurrencies brings any solution. in which he explained the situation taken in Nigeria by the government and the central bank to ban cryptocurrencies in their national territory and even though the reasons they gave seemed incongruous or worthless how cryptocurrencies affected the value of the naira (Nigeria's currency). The government and the central bank decided to go ahead with the bans and as of today ordinary Nigerians are finding the going increasingly tougher.

Lack of liquidity, a growing problem.

Before the ban on cryptocurrency trading in Nigeria, exchanges kept cash (naira) in banks and had a steady flow of deposits. In other words, there was a unified or constant source of liquidity, and, therefore, there was always cash to exchange for bitcoins and the price remained stable.

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Current school news

But now that liquidity is lower the country's exchanges have different prices for bitcoin due to the increased costs of acquiring the asset. Now that banks are rejecting cryptocurrency-related deposits and closing bank accounts, there is not enough liquidity on exchanges. And as deposits that normally every day were made on exchanges such as Naijacrypto, dropped by 80%. As a result, it is now much more expensive for companies to get cash and carry out transactions, so the asset price multiplies.

But who does this hurt, well, as mentioned in the previous article where I talked about the ban on cryptocurrency trading, this mainly affects ordinary Nigerians or those who do not have access to an international economy and were using cryptocurrencies to do so and even though the situation in Nigeria regarding cryptocurrencies has normalized "relatively " it is still far from being the same as a few months ago, for example the amount of deposits that exchanges were receiving daily have decreased by up to 20%.

Will cryptocurrencies in Nigeria be whitelisted again?

For now it is difficult to know, as one of the main reasons why cryptocurrency trading was banned on Nigerian soil was because according to the government and the central bank, cryptocurrency trading is devaluing or destroying the Nigerian economy and currency, and was also being used to finance social activist movements like END SARS, considered anti-government or terrorist.

So as long as the government continues to think that cryptocurrencies and especially bitcoin are making the Nigerian economy useless, the bans will continue, or maybe I think they will remove the bans on cryptocurrency trading when the big tycoons in Nigeria have been able to store enough bitcoin or cryptocurrencies at the current price and when they remove the bans and they have gone up more in price, they can have an open market and many comparators and exorbitant profits.

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