Cryptocurrency
Bitcoin is becoming scarce as BTC Miners sell less BTCs
BTC supply is tightening, as miners refuse to pump their coins into the crypto market.
The recent adoption of the world’s flagship crypto asset by some institutions and many retail investors has given BTC miners incentives to start hoarding Bitcoins.
Taking a critical look at wallets or addresses belonging to Bitcoin miners via Glassnode analytics, Nairametrics found out that most BTC miners haven’t been selling their cryptos, despite BTC’s price gaining significant value since the third halving.
Glassnode analytics also revealed that BTC miners currently hold more than 1.8 million BTC, recording the highest amount held by miners in over two years. Same as BTC investors, miners have decreased the sell-offs.
READ: Halving: Bitcoin whales gather more BTC, waiting for bullish run
This macro stated above makes a solid case for Bitcoin bulls because BTC miners typically sell their BTCs to cover operational costs like electricity bills, and computing hardware. Even though the price of Bitcoin has gained more than 35% since the most recent halving, BTC miners now prefer to hold their BTCs for now. This means that BTC supply is tightening, as miners refuse to pump their coins into the crypto market.
READ: Ethereum whale transfers 62,134 ETH as Ether remains above $385
What you should know: BTC miners help in facilitating BTC transactions and providing security on the blockchain network. The importance of BTC miners can’t be underestimated as they perform these functions, by solving computational tasks which permit them to chain together blocks of transactions.
Bitcoin mining involves the act of solving tasks that come in the form of algorithms in affirming a transaction and fixing it within a block on the blockchain.
READ: Banks reduce dollar spending limit on naira debit cards to $100
By mining BTC, you can earn a BTC without having to pay money for such. BTC miners collect BTC as a reward for completing “blocks” of confirmed transactions which are added to the blockchain network.
Business News
Paypal’s Venmo now permits cryptocurrency trading
Venmo will support four different cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
Business News
ABCON asks CBN to check impact of cryptocurrencies on diaspora remittances
The association also noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfers.
The Association of Bureau De Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to introduce measures that will neutralize the positive effects of cryptocurrencies as a channel for diaspora remittances.
This is to redirect diaspora remittances away from cryptocurrency exchanges to official channels and also protect such against potential disruptions.
This call was made by ABCON during its Quarterly Economic Review for the first quarter of 2021 where it commended the CBN for the N5/$ rebate scheme introduced to encourage diaspora Nigerians to use official channels to remit their funds.
However, the association noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfers.
READ: Nigeria among worst countries to start a career, and they all don’t accept crypto
What ABCON is saying in their statement
The association in its statement said, “It is noteworthy that public acceptability for cryptocurrency exchanges are rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding Cryptocurrency a safe haven for their wealth in case of any eventuality.
In most Emerging Markets Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services. Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.”
READ: Atsu Davoh is building ways for Africans to easily acquire and spend cryptocurrency
According to ABCON, “Cryptocurrency transactions are faster than the conventional transfers, which require passing through banks reliant SWIFT, the sluggish, half-century-old interbank messaging system that handles cross-border payments.
These exchanges override the political complications of official channels. The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.
Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate. Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel.”
ABCON also expressed concerns over the country’s huge unemployment rate, urging the government to apply radical approaches with the use of both conventional and unconventional economic and political tools to redress the trend.
READ: Afreximbank President reveals ways Nigeria can boost diaspora participation in economy
What you should know
- It can be recalled that the apex bank had about 2 months ago, warned the Deposit Money Banks, Non-Financial Institutions and other Financial Institutions against doing business in crypto and other digital assets.
- The CBN directed financial institutions to immediately close the accounts of persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.
- The Securities and Exchange Commission (SEC) had a few days ago, revealed that it is working with the CBN for a better understanding and regulation of cryptocurrencies in the country.
