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Cryptocurrency

Why Nigerians trade in crypto, $500m worth of bitcoin traded in 5 years by Nigerians -Moghalu

Moghalu said Nigerians trade in cryptocurrencies because it protects them from the fluctuations in the value of the naira.

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Kingsley Moghalu

A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has said that $500 million worth of Bitcoin has been traded in Nigeria within the last 5 years.

This is as the former Presidential Candidate, who was once in charge of the financial systems directorate at the CBN said that many Nigerians trade in these cryptocurrencies because it protects them from the fluctuations in the value of the naira.

This was disclosed by Moghalu during an interview on a Channels Television programme, Sunday Politics while reacting to the recent CBN policy which directed all deposit money banks and other financial institutions to close accounts that transact in cryptocurrency.

He faulted the move of the apex bank, saying that regardless of the risks involved in trading in cryptocurrencies, he would not recommend an outright ban.

READ: Nigeria among worst countries to start a career, and they all don’t accept crypto

What Kingsley Moghalu is saying

Moghalu during the interview said, “A lot of the activities in the world are going digital and I would not recommend banning it (cryptocurrencies) outright.

“$500 million worth of Bitcoin has been traded in Nigeria within the last five years and Nigeria is one of the top 10 countries in the use of cryptocurrencies in the world today”.

‘’Also, one of the things that attract Nigerians a lot to cryptocurrencies is because the Central Bank and I have said this you know a lot of the policy-making that has come out of the bank in recent years have been ad hoc, changes from today to tomorrow and so on, policies concerning remittances, policies concerning foreign exchanges and so on and so forth.

‘’But trading in these cryptocurrencies for many people protects them from fluctuations in the value of the naira because every fiat money, every currency in the world over time depreciates in value because of inflation and this is one of the reasons people go for cryptocurrencies.’’

READ: Binance, Quidax, Buycoins Africa, Bundle obey CBN’s crypto ban

While explaining that crypto is becoming a real factor in the country’s investment ecosystem, as well as a source of livelihood for many Nigerians, he supported the sentiments of many other Nigerians, noting that the move is seen as though the government is always taking actions aimed at taking away opportunities from Nigerians especially in a depressed economy.

Moghalu said that he believes that any investment has risks and if he was in a position to make a decision, it would be to balance the risks as against the current realities of the country.

He said, “The Nigerian Government should try to make the investment climate far more friendly and efficient than it is now. It is unfriendly, that’s why the foreign investment is declining.’’

bitcoin train

READ: Why Bitcoin could triple in value annually

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What you should know

  • It can be recalled that the CBN had earlier directed deposit money banks and other financial institutions to immediately close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.
  • The order was contained in a circular to banks and other financial institutions, signed by the Director of Banking Supervision, Bello Hassan, and was expected to take effect immediately.
  • The CBN action has provoked some reactions from Nigerians, many of whom have faulted the apex bank’s directive, saying that there is no logical reason to prohibit crypto enabled transactions and that it runs contrary to the present administration’s promise to lift 100 million Nigerians out of poverty.
  • The CBN released a press statement further justifying its position to the general public and clearly stating that cryptos are issued by unregulated and unlicensed entities which begs the question of legality. It also claimed that cryptocurrencies have been used to finance several illegal activities including terrorism and money laundering.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

7 Comments

7 Comments

  1. Anonymous

    February 8, 2021 at 2:27 pm

    I do hope the Nigerian government will listen to the silent voices of her people and make economic environment more friendly. Our youths need financial redemption.

  2. Anonymous

    February 8, 2021 at 6:09 pm

    I believe d cryptocurrency n blockchain technology is d best n easiest way to lift many of nigerian’s youth out of poverty. We urged d appex bank to have a rethink of it’s outright ban of cryptocurrency in d county. Instead of outright ban, they should try n regulate it n generate more revenue of d system.

  3. Oberabor Michael Ajokah

    February 8, 2021 at 7:58 pm

    Money laundering and terrorism finance are done in USD

  4. Michael Abraham

    February 8, 2021 at 11:29 pm

    Before the advent of cryptocurrency, has FIAT currency not been used to finance terrorism and other similar activities, why was a ban not placed on the use of fiat currency at that time?

    • AbdulDanaljannah

      February 9, 2021 at 3:37 pm

      I think the Govt should sanitize d system free of scammers rather than outrightly placing a ban on d entire system.

  5. Admission

    February 9, 2021 at 11:43 am

    God will help use in this country..

  6. LOLO LUCIA

    February 9, 2021 at 12:53 pm

    Make una cancelled dat talk how that one take concerned una make una mind una business ooo e no concern CBN OR GOVT na my money na my business wether I de eat or not govt or CBN no know from cryto God take dey provide for me make una mind una business na beg I dey beg all of una ooo¡!!

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Cryptocurrency

Bitcoins dash up strongly amid high buying spree

Bitcoin traded at $48,715.70 with a daily trading volume of $54.8 billion. Bitcoin is up 6.05% for the day.

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MicroStrategy, Data obtained from thecrypto analytics firm says that, the number of Bitcoin addresses having at least 0.1 BTC has risen by 14% over the past one year, Did Satoshi Nakamoto cause the panic sell-off in Bitcoin market, Bitcoin hits $8,826, Pigs hit hard at BTC market, plunges 8%

The price of bitcoin and saw strong gains amid high buying pressures particularly from wealthy investors, as the entire market capitalization surged by 5.62% at the time this report was written.

Bitcoin traded at $48,715.70  with a daily trading volume of $54.8 billion. Bitcoin is up 6.05% for the day.

This is coming on macros suggesting the daily Bitcoin Spent Output Profit Ratio has seen a full reset and turned negative for the first time in five months – investors were on average moving BTC at a slight loss, indicating profit-taking has abated.

In an exclusive interview with Nairametrics, Louis Schoeman, a Snr. Forex analyst at Forexsuggest, a Luxembourg-based currency analytic firm explained the rationality behind Bitcoin’s recent surge.

READ: About 33% of pension funds, hedge funds now own digital assets such as Bitcoin

“A bitcoin market correction has definitely been made in the last 7 days. According to our analysis, the reason for the price rise again is that hedge funds are starting to invest more aggressively in bitcoin,” Schoeman said.

In addition a leading global bank, Citi had recently suggested the flagship crypto-asset could “become the currency of choice for international trade,” thanks to its “decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability.”

Crypto experts also argue that such strong demand in the Bitcoin market is largely attributed to the fact institutions are coming.

The market liquidity is tightening at the flagship Crypto market, as there are less than 4 million BTCs in circulation available for upcoming investors including the likes of Grayscale, Paypal, Microstrategy, hedge funds, MicroStrategy Inc.’s Michael Saylor purchased more Bitcoin to raise the enterprise-software company’s holdings to more than $4 billion.

READ: British hedge fund earns £540 million from selling half of its Bitcoin holdings

Recent reports reveal that MicroStrategy Inc. recently bought more Bitcoin to raise the enterprise-software firm’s holdings to more than $4.3 billion.

It’s critical to note that just 21 million Bitcoins are ever going to be produced in total, and presently, there is about 18.9 million Bitcoin in circulation.

This shows a differential of about 2.1 million Bitcoin that are left to be produced, not forgetting about 4.5 million Bitcoins that have already been lost forever.

bitcoin train

This also means that liquidity is drying up, with a growing demand for Bitcoin increasing, the price would most likely stay north.

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Cryptocurrency

$119 billion valued investment bank, Goldman Sachs starts Bitcoin trading

Goldman Sachs Group Inc has begun a crypto trading desk that would be handling bitcoin futures and non-deliverable forwards on behalf of its customers.

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Goldman Sachs

The world’s leading investment bank, Goldman Sachs Group Inc, has begun a crypto trading desk that will be handling bitcoin futures and non-deliverable forwards on behalf of its customers.

In a report credited to Reuters, it was revealed that the elite investment team will be positioned under the U.S. bank’s Global Markets division.

The desk is part of the investment bank’s fast-growing crypto-assets sector, which also includes projects involving central bank digital currencies and blockchain technology.

Goldman Sachs is also exploring the creation of a bitcoin exchange-traded fund and has issued a request for information to explore such a crypto service.

READ: Dubai-based hedge fund plans to sell $750 million worth of Bitcoin for Cardano and Polkadot

What you should know: The $119 billion valued investment bank is one of the world’s most elite investment bank, headquartered in New York and known to offer a broad range of financial services across investment trading, banking, securities, and lately consumer banking to a large and diversified client base.

This comes as no surprise, as highly respected business leader, Michael Saylor had earlier revealed that top representatives from about 7,000 companies attended MicroStrategy’s recent Bitcoin seminar, which the leading business intelligence company organized to aid companies interested in buying Bitcoin as a treasury asset.

“We had people from SpaceX there. We had people [from] some of Elon Musk’s companies. We had people from Marathon there.

“The ones you would expect were there, but of course, there’s an avalanche of private companies, and there were a decent number of public companies and treasurers and CFOs that were lurking.

“Some don’t want to have their names mentioned, as you can imagine, because it’s a sensitive topic,” Saylor said.

READ: The odds against Bitcoin- Goldman Sachs

However, a significant number of traditional finance experts are not buying into the flagship crypto’s bullish run, as they see little value in the digital currency on the account that they believe Bitcoin, and other leading cryptos are just part of a larger speculative bubble.

At press time, Bitcoin traded at $49,026.27 with a daily trading volume of $54.6 Billion. Bitcoin is up 5.52% for the day.

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