By Harshal Gollen
The cryptocurrency revolution has spread rapidly all over the world, and Africa is no exception. However, it is curious to see that one African country is as large as the rest of the continent combined, when it comes to cryptocurrency transactions and business. Nigeria is leading the continent for cryptocurrency transactions, especially in Bitcoin, to the extent that the value of cryptocurrency transactions in Nigeria is more than that for the rest of the continent combined. It is therefore interesting to see how this situation came to pass, and therefore not surprising that a number of leading global crypto brands are making a beeline for Nigeria.
Nigeria has become one of the fastest-growing and largest markets for cryptocurrencies in the world, which has led to the likes of Binance, Paxful, Crypto.com, FTX and more entering the Nigerian market. According to studies, Nigeria saw its largest increase in peer-to-peer lending in the crypto space in October 2020, where its P2P volumes grew to $32.5 million. This was the largest in Africa by far, as Nigeria was followed by South Africa, with $9 million, and Kenya with $7.4 million. The biggest reason for Nigeria’s dominance in the crypto space in Africa is its demographics – it is one of the most youthful countries in the world, with nearly 32% of its 200 million population being classified as young. Thus, a large part of the country is tech savvy, and in tune with global trends, which makes it much easier to adopt cryptocurrencies.
- Nigeria goes missing in $38bn cotton market
- Re-assessing Africa’s relevance in global affairs under climate change (5)
- Covid-19: World Bank, African Union agree modalities to deploy 400m J&J…
- Disinflation continues in Nigeria with 17.93% May CPI
- Nigeria flags off construction of its $7bn NLNG Train 7 project
Another big reason behind this trend is that African currencies, in general, are volatile. This is to do with the state of their economies, and the rampant corruption and misgovernance which leads to their currencies being unstable, and therefore not a good investment. African currencies are also very prone to inflation as a result, which erodes their value quickly, and therefore we are seeing this growing flight to Bitcoin and other cryptos, which are considered more stable. Cryptos are also borderless, in that they can be bought and sold anywhere in the world, and transaction fees are minimal, making them well-suited to sending and receiving money to and from other countries.
It is also interesting that cryptocurrencies are being used not just as investments, but also in various other sectors as a way to attract more users. One of the best examples of this is in the online gambling space. There are numerous online gambling operators who now offer players the chance to gamble with cryptocurrencies. This phenomenon has led to the rise of popularity of BTC baccarat and other crypto versions of casino games, and given how popular gambling and sports betting is in Nigeria and other African countries, it has been a great way for these online operators to draw more customers to their gambling sites. Online crypto gambling has also therefore seen a rise in popularity in these markets, and cryptocurrencies can help drive demand for a number of sectors in a similar manner.
Another important factor that has driven Bitcoin adoption has been the recent protests against police and military action in Nigeria, called #EndSARS. Many Nigerians saw their bank accounts being frozen due to their association with the protests, but were able to use Bitcoin to continue making transactions. Bitcoin was also used to provide for medical and legal bills for students and other youths who were arrested while protesting peacefully, thus showing how cryptocurrencies can be a great asset in these circumstances, since they are not controlled by a central authority and therefore cannot be restricted. This even captured the attention of Jack Dorsey, the co-founder of Twitter, who sent out a link to help the movement by donating Bitcoin.
Thus, we can see how global and local events came together to make Nigerians the biggest adopters of Bitcoin in Africa, and in the world as well.