The world’s most dominant cryptocurrency, Bitcoin is currently being sold at a 63% premium in Nigeria as foreign exchange scarcity amid the new cap on banks’ withdrawals increased demand for the unregulated virtual currency.
Bitcoin price skyrocketed to N17.8 million or $38,630 a coin on Binance, the world’s largest cryptocurrency exchange platform mostly used by retail traders in Africa’s largest economy.
In the global market, Bitcoin price stood at $23,656 per coin at about 9:37 am Nigerian time on Monday, January 30, 2023. Indicating that the digital currency is being sold at $14,974 or a 63% premium over the current price of the commodity, Investors King research has shown.
Chronic foreign exchange scarcity due to a series of weak fundamental factors has plunged the Nigerian Naira against its global counterparts since Russia invaded Ukraine in February 2022.
The Nigerian Naira is presently trading at N460 to a United States Dollar on the interbank forex section while at the parallel or black market, the local currency traded at N750 to a US$1 in the early hours of Monday.
Cryptocurrency traders and businesses in Nigeria mainly traded using the black market rate because of the inaccessibility of N460/$1. Therefore, it is the rate quoted and used on Binance Peer2Peer (p2p) platform and other foreign exchange segments where the dollar is readily available.
This wide foreign exchange rate coupled with the new Naira policy that restricted withdrawals to N500,000 per week for individuals and N5 million for corporate entities bolstered demand for digital assets.
Bitcoin price plunged from $68,990 to $15,480 in 2022 after Luna declined from $119 a coin or over $40 billion market capitalisation to zero.
Shortly after, other cryptocurrency assets like Solana, Ethereum, BNB, etc lost substantial value and kick-started cryptocurrency’s largest bearish trend since 2009.
Solana dropped from around $200 a coin to $12, currently trading at $25. Ethereum dipped from almost $5,000 to $800 per coin while BNB halted its decline at $196 before pulling back to $300 at the time of writing, still below the $600 attain in 2022.
Bitcoin is the most capitalised cryptocurrency at $448.92 billion. Year-to-date, the digital asset has returned 40.17%.