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Nigeria has the second largest market for cryptocurrencies in Africa in 2022 – Bitget report

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A new cryptocurrency market report titled, “What Does the Future Hold for Crypto Exchanges,” has revealed that in terms of the cryptocurrency market size in Africa, Nigeria has the second largest market, behind South Africa. The report mentions that South Africans primarily use crypto as an alternative investment, while Nigerians use it mainly for savings.

The report was done by a cryptocurrency exchange, Bitget, in partnership with the famous American management consulting firm, Boston Consulting Group (BCG) and crypto-focused investment firm, Foresight Ventures. The report dives into the competitive landscape of crypto exchanges, unveils substantial development trends in crypto trading markets, its role in enabling the Web3 economy and shares insights on how to navigate the crypto space during a bear market.

The report explains that the African continent’s cryptocurrency centralized exchange trading accounts for less than 1% of the spot and derivative trading seen around the world. It went further to rank South Africa as #1 on the continent as a result of the country’s “more advanced financial infrastructure and fiat-to-crypto payment rail.”

In terms of Africa’s future potential in the cryptocurrency space, the report reads, “We expect strong growth in crypto adoption in Africa. However, derivatives may lag given their limited use in traditional markets.”

Nairametrics was able to interview Gracy Chen, the Managing Director of Bitget, to get her insights into the African market and its potential for growth.

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What must be done in Nigeria to improve participation in the cryptocurrency space?

Nigeria has been found to be the second largest crypto market in Africa following South Africa, however, the ratio of Nigeria’s population to crypto adoption is quite high. Crypto penetration in Nigeria is over 40%, higher than traditional banking penetration in the country. In my opinion, education is a key factor to increase participation, as people will join the crypto space with a better understanding of cryptocurrencies and their value and uses. So efforts and investments are needed in crypto education for countries in emerging markets like Nigeria to improve participation, such as providing reliable educational resources, learning platforms and communities for crypto-related topics.

In terms of regulation, how badly is the limited regulatory oversight of the crypto market affecting participation in the African continent?

Like I previously mentioned, the adoption rate is quite high in Nigeria, and it is the second largest market in Africa. Right now, regulatory efforts in the market have proven not to have a great impact on adoption/trader activities. But we could see P2P trading, for instance, become very popular in Nigeria as regulation banned commercial banks from dealing in transactions with crypto exchanges and related accounts in early 2021.

The report mentions that Nigerians mostly use crypto as a means of savings. How did the report come to this conclusion?

The report includes different studies in regions. Data in foreign exchange markets shows that Nigeria’s currency (Naira) performance recently has experienced a steady declination. I think for most people in Nigeria, keeping money in foreign currencies like the US dollar is a more effective way of saving for future interests than that of saving in local currency. They could make use of different cryptocurrencies, the relatively volatile ones like BTC, ETH, and people can also invest in stablecoins, which are quite stable and linked to USD.

The report mentions that while strong growth in crypto adoption is expected in Africa, derivatives trading may lag given their limited use in traditional markets. What must Africa do in order to boost derivative trading participation?

Permit me to reiterate the need for mass education for mass adoption. People need education about financial knowledge and cryptocurrency investing. Then they could better understand the benefits and risks of different derivative trading offers and find the most suitable ones for themselves. These are effective ways to boost derivative participation.

In Bitget, we launched an innovative trading product called the ‘One-click copy Trade’. This is a pioneer use case in social trading and has amassed over 55,000 professional traders, with approximately 1.1 million followers. This feature allows new players and veteran traders to learn from and follow different trading strategies and participate and earn their share from the crypto market in just one click. This is part of our mission of ‘Better Trading, Better Life’ for everyone. Both the traders and copiers benefit from the outcome of their trades and presently we are the world’s largest crypto copy trading platform and one of the five largest crypto derivatives exchange platforms according to Coingecko.

Interest nuggets from the Report

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