According to a new report, approximately 33.4 million Nigerians, or 35% of the country’s adult population, are holders of cryptocurrencies or have traded them in the past six months. This report attributes rising inflation to the decline in the value of local currency, which is why cryptocurrencies are becoming more popular.
With P2P Platforms, Convert Fiat Currency to Crypto
Kucoin, a cryptocurrency exchange, has released a new report that shows 35% of Nigerians, which is 33.4 Million people, own cryptocurrencies, or traded them in the last six months. The report also says about 52% of Nigerian cryptocurrency investors “allocate over half of their assets to cryptocurrencies.”
As noted in the crypto exchange’s report, about 65% of Nigerian crypto investors are known to convert from fiat to cryptocurrency via peer-to-peer (P2P) trading platforms. Many financial institutions in Nigeria are following the directive issued February 20, 2021 by the Central Bank of Nigeria (CBN). This is evident by their increased usage of peer-to–peer trading platforms.
CBN instructed financial institutions to freeze or block bank accounts associated with cryptocurrency entities. A Bitcoin.com News report has shown that financial institutions will face sanctions if they are caught helping cryptocurrency-related transactions. The directive was not the only warning given by the CBN. It also included a list of central bank officials, including Godwin Emefiele the governor.
Naira depreciation
However, even though the governor warned of the dangers, findings from the study suggest that Nigerians intend to boost their crypto investments. According to the report:
A significant finding was that 70% of Nigerian cryptocurrency investors plan to grow their investments in the coming 6 months.
According to the study, one factor driving the increased adoption of cryptocurrencies by Nigerians is the falling value of the Nigerian naira. According to the report, in six years the value of the naira currency has fallen by 20%. This is why 37% invested in cryptocurrency three years back. This number is much higher than that of the 6% who had invested six years earlier.
Report also mentions the Covid-19 epidemic as another factor which prompted 26% to invest in cryptos over the last six months.
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