Nigeria has emerged as the second biggest market for bitcoin, trading over 60,000 bitcoins, valued at $566 million, between 2015 and 2020.
Since 2017, the volume of bitcoin trade in Nigeria has increased by 19% while the highest volume of trade (20,504.50) was recorded in 2020, according to reports.
The West African nation and Africa’s biggest economy trails only the United States on Paxful, a leading peer-to-peer bitcoin market place. The sharp rise in bitcoin trade, particularly in 2020, has been attributed to the lockdown and the “End SARS” protest across Nigeria.
During the End SARS protests, the Nigerian authorities accused some foreigners and members of the Nigerian diaspora of funding the protest. And in the government’s quest to end the demonstrations, the Central Bank of Nigeria instructed private banks to freeze several organizations’ and individuals’ accounts to stop the flow of funds supporting the protests, according to Human Rights Watch.
To bypass the restrictions, the protesters switched to using bitcoin in order to raise funds to sustain the pressure on the federal government to act on police brutalities and other human rights abuses by the country’s security forces. The change to bitcoin was in no small part due to explicit advice by Twitter CEO, Jack Dorsey, who supported the protest to the anger of certain officials of the Nigerian government.
According to reports, bitcoin accounted for around 40% of the nearly $400,000 raised within a week.
The coronavirus-forced lockdown in Nigeria also saw the bitcoin trade skyrocketing, recording a 37% increase in new registrations. Paxful, which controls 52% of the bitcoin market worldwide, is the most popular bitcoin platform in Africa and Nigerians make up a quarter of its customer base with 1.3 million registered accounts.
“They mostly use the platform for peer-to-peer and arbitrage trading,” says Nena Nwachukwu, Paxful Nigeria regional manager. “Remittance is also a popular use case.” Nwachukwu says bitcoin transfers are “much cheaper and faster than using traditional money transfer operators.”
Also, cross border challenges in money transfer accounts for the growing using of bitcoins, according to Paxful chief executive officer and co-founder Ray Yussef. “Africa’s largest economy has problems and restrictions in sending and receiving money from inside and outside its borders.”
The U.S, which tops the bitcoin market, recorded a 32% decline in the number of bitcoin trades executed in 2020 while the Philippines recorded the biggest increase with 7,339% more bitcoin traded in 2020 compared to 2019, according to bitcoin.com.
China traded $181.3 million worth of bitcoin in the last five years, Canada $131.1 million and the UK $119.4 million to complete the top five bitcoin trading economies.