$430 Million Worth of Bitcoin Traded Amidst CBN’s Restrictions
Paxful has said it has 1.5 million cryptocurrency traders/investors in Nigeria despite the Central Bank of Nigeria (CBN) restrictions.
Paxful, one of the major peer-to-peer (P2P) cryptocurrency exchange platforms in the world with a strong presence in Nigeria and Africa as a whole, has said it has 1.5 million cryptocurrency traders/investors in Nigeria despite the Central Bank of Nigeria (CBN) restrictions.
According to the exchange platform, Nigerians have traded over $1.5 billion in cryptocurrency volume on the platform up until 2021. This, the company said Bitcoin accounted for $420 million, adding that the number jumped by 23% between February 2021 and March 2021. Just after the CBN restricted banks from facilitating cryptocurrency payments for traders and investors in Nigeria.
Last year February, the central bank of Nigeria made a statement saying “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchange is prohibited.”
However, Paxful revealed that;
“Nigeria is leading in cryptocurrency, and we expect this growth to only continue. To share some stats:
- Nigeria is our largest market, with 1.5 million users and over $1.5 billion volume to date (since 2015)
- Compared to last year – we are on pace to have 23% more bank transfer trades in Nigeria on the platform than last year
- Compared to last year – we are on pace to have 36% more bank transfer volume in Nigeria on the platform than last year
- Looking at YoY data from end of June 2020/2021, we see increases in Bitcoin trading volumes of 57% in Nigeria
- Looking at YoY data from end of June 2020/2021, we see increases in user numbers of 83% in Nigeria
- To date, in 2021, we’ve seen over $430M in USD traded in BTC alone in Nigeria
- From Feb 2021 to March 2021 (after CBN restrictions were placed), trade volume increased over 23% on Paxful in Nigeria
- As of April 2021, Bitcoin P2P trading in Nigeria has surged by 27% since restrictions were introduced by CBN”
Asides from Paxful, there are other P2P platforms that focus on buying and selling bitcoins and other digital currencies in Nigeria.
Binance, Bybit, Kucoin, etc are some of the known cryptocurrency exchange platforms in Nigeria, one of the largest participating nations. However, there are no available figures to authenticate their transaction volume or value like Paxful.
Since the CBN restricted banks from dealing in cryptocurrencies, Nigerians now rely on P2P platforms like Paxful, Binance and others for their cryptocurrency transactions.
Bitcoin Surge to 9-Month High Amid Banking Turmoil
Bitcoin has surged to a 9-month high amid the banking turmoil in the United States. The flagship cryptocurrency is up by 50% since the beginning of 2023, trading at $27,779 at the time of writing this report.
Investors King earlier reported that the crypto mobile applications also increased by 15 per cent due to the uncertainty surrounding the US banking sector following the collapse of three big banks in the United States. It would be recalled that Silvergate, Signature and Silicon Valley Banks were shut down last week due to issues related to liquidity.
Investors and crypto experts have extolled the resilience of Bitcoin amid the banking crisis last week. They noted that bitcoin is trading at its lowest correlation to stock in months. Thereby making the most capitalised cryptocurrency a valuable alternative asset.
For instance, the Head of Ark Investment, Cathie Wood said “Indeed, during the last week, crypt assets behaved like safe havens: along with gold”.
Meanwhile, Bitcoin continued to hold firm during the early trading hours on Tuesday (today) while other crypto assets were trading lower. Traders across the globe are looking at the US Federal Reserve’s interest rate hike as its two-day FOMC meeting begins today.
Similarly, there has been an additional confidence boost in the global banking sector following Sunday’s announcement that Swiss banking giant UBS agreed to buy its crisis-hit rival Credit Suisse in an emergency deal worth over $3 billion.
Several largest central banks, including the Federal Reserve, the Bank of England, and the European Central Bank, also came together on Sunday to announce “coordinated action” to enhance liquidity in their standing U.S. dollar swap arrangements.
Interestingly, experts have predicted that bitcoin would benefit from central bank efforts to bolster liquidity in the global financial system. Bitcoin rose to a record of $69,000 in November 2021 after central banks and governments launched unprecedented monetary and fiscal stimulus measures.
Cryptocurrency Mobile App Downloads Spike by 15% Amid US Banking Crisis
Cryptocurrency mobile applications experienced a surge in downloads as Americans look to diversify their investments following the crisis that rocks U.S. banks in the past few weeks.
A report by Apptopia revealed that the top 10 crypto mobile applications saw a rise of 15% since the collapse of Silicon Valley Bank.
Coinbase, Crypto.com, Trust, Binance, Bitcoin Crypto DeFi Wallet, Blockchain.com, KuKoin, Kraken, eToro and BitPay were the top 10 crypto apps listed in the United States.
Investors King understands that the increase in crypto mobile app downloads was a result of the uncertainty surrounding the U.S. banking sector following the collapse of three leading banks last week.
Also, another contributing factor was global happenings like the crisis in Credit Suisse, the second-largest bank in Switzerland and one of the largest in the world. Last week, the Swiss national bank injected $54 billion into the failed bank before it was finally acquired by UBS, the largest bank in the country earlier today in about a $3 billion deal.
Despite the unregulated nature of the cryptocurrency space, retail investors and institutional investors are now looking to risk it all ahead of the Bitcoin halving expected to take place in May 2024.
Bitcoin halving is a process where Bitcoin reward is halved every 4 years. The process reduce bitcoin supply while demand remained constant and simultaneously bolstered the value of the digital asset.
It is important to note that top ten banking apps in the U.S. surveyed during the same period experienced a 5% decline in mobile downloads. This includes banks like Capital One, Chase, Bank of America, Wells Fargo, and Citi bank among others.
Meaning capital inflow into the cryptocurrency space will continue to increase into 2024, especially with the Fed and other central banks expected to continue to raise interest rates to manage rising inflation.
According to CoinMarketCap, cryptocurrency’s total market capital rose by 8.3% to $1.1 trillion during the surveyed period while Bitcoin and Ethereum value grew by 15% and 9%, respectively. Another evidence of rising demand for unregulated digital assets.
Why Cardano Founder, Charles Hoskinson Wants Crypto to Cut Ties With Bank
Amid the collapse of three banks in just two weeks, Cardano’s founder, Charles Hoskinson has stated that the crypto industry needs to sever relationships with traditional banks.
He started this in a series of tweets puts out on Thursday.
Hoskinson’s opinion comes as a result of the ongoing crisis and the collapse of about three reputable financial institutions, of which the most recent is the collapse of the New York-based Signature Bank.
The Cardano Chief added that crypt banks should be digitized, stating that once that happens, it would mean the end for the traditional banking sector. Hoskinson worries that crypto-focused firms are too dependent on traditional banks.
Investors King earlier reported that crypto firms are beginning to have difficulty finding partnering banks for their services after three of America’s leading financial institutions, Silvergate Capital, Silicon Valley Bank, and Signature Bank were shut down by regulators earlier this month, propelling severe losses for numerous crypto-focused firms.
Most prominent among the affected crypto-focused firm is Circle, the producer of USD stablecoin which had $3.3 billion stuck in Silicon Valley Bank. This caused USDC to plunge to as low as $0.87 before rebounding to its true value of $1 value.
Similarly, crypto exchange Coinbase said it held $240 million in corporate cash at Signature Bank, while Paxos had $250 million exposure to the same bank.
Meanwhile, a number of crypto experts and enthusiasts have extolled the crypto market and the industry in general for its resilience in the past weeks amid a series of negative events involving the collapse of three giant banks.
The flagship cryptocurrency had exploded above $26,000 on Monday after US President, Joe Biden assured that the banking system is “safe”.
“Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you we will not stop at this; we’ll do whatever is needed. Your deposits will be there when you need them”. Joe Biden said in a brief televised statement from the White House.
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