Considering the cost of purchasing the world’s most popular cryptocurrency on Africa’s largest crypto market, the recent CBN reminder restricting Nigerian financial institutions from buying bitcoin and other crypto-assets is fast changing the dynamics of the Nigerian crypto market.
Nairametrics recently observed that the flagship crypto asset, bitcoin, traded at a 37% premium on some P2P exchanges and other non-traditional channels (N570 to $1) when compared with the Nigerian official exchange rate (N415). This means that bitcoins were more expensive on these platforms compared to their average price on other crypto exchanges of around $57K.
As a result of the aftermath, Nigeria, Africa’s most powerful economy by GDP, is no longer at the top of the list of countries with the highest interest in bitcoin, but slipped to fifth place behind El Salvador, Turkey, Austria, and the Netherlands.
Read: How to avoid getting scammed while using P2P to buy Bitcoin in Nigeria
Nigeria dropped to fifth place with a score of 54, while the central American nation takes the lead with a perfect score of 100.
Despite the central bank’s directive not criminalizing ownership of bitcoin, crypto experts believe that it will make it more difficult for them to process debit, credit, and bank transfer transactions. Nigerians who buy crypto assets often use their local currencies to do so, increasing the complexity of the process.
Nairametrics interviewed several crypto exchanges regarding the challenges Nigerians face buying bitcoin at a fair value since leading Nigerian payment providers such as Paystack and Flutterwave have arbitrarily cut ties with crypto exchanges.
Read: JPMorgan says institutions are buying Bitcoin rather than gold
The Naira has become more complex to use for bitcoin transactions as a result. Young Nigerians are particularly affected by this because payment partners that transact in the local currency no longer want to deal with crypto exchanges as a result of the directive of the Central Bank of Nigeria. This has put an indefinite halt on deposits of naira to crypto exchanges.
Additionally, the prevailing dollar scarcity in Africa’s largest economy has driven many young Nigerians to buy dollars at black market prices of as high as N570, despite the fact that all crypto assets are denominated in U.S. dollars.
Due to the apex bank’s directive, the rate of purchasing bitcoin and other crypto assets in Nigeria is currently having a negative effect on the Nigerian crypto community, which suggests it is getting much harder to purchase bitcoin at a fair price in Africa’s most important crypto market.
