Crypto regulation

Crypto regulation issued about two weeks ago by the Central Bank of Nigeria that banned the activity of cryptocurrency traders in Nigeria, has caused an upwards trend with Bitcoin trading at a premium in Nigeria. Whilst the BTC value is going through the roof, trading at a 36% premium in Nigeria. This simply means while BTC is valued at $51,000, in Nigeria, the value is around $71,000. 

The effect of the CBN’s ban on crypto exchanges has been an increase in the public’s interest in BTC. Nigeria accounts for the majority of BTC’s trading volume on the continent and what the ban has done is to put a premium on BTC prices. 

Nigeria’s crypto trading volume on Paxful.

As at February 17, BTC was trading at a 36% premium in Nigeria. In simple terms, while BTC is valued at $51,000, in Nigeria, that value is around $71,000. 

BTC prices on a Nigerian cryptoexchange

Government’s Crypto Regulation: A Blessing or a Curse

Nigeria’s BTC premium is also one of the highest globally by a large margin; in South Africa, the premium is 3.2% while countries like Malaysia and Argentina have premiums of about 1%. What it shows is that Nigeria now has an established cryptocurrency culture and there’s little a CBN policy can do to reverse that.

In Nigeria, what we’re seeing is that the exchanges are working around government’s crypto regulation with p2p trading options. It is in line with the thinking that bans do not work; instead bans make the black market stronger and only end up driving up prices.

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