One Bitcoin now fetches about N10.25 million in the local Nigerian currency, after the world’s largest cryptocurrency surged as much as 10 percent to $21,293 in New York on Wednesday, leaving Nigerian Bitcoin investors in the money.
Bitcoin surpassed $21,000 for the first time, another milestone in what’s been an eye-popping rally for the controversial digital asset this year.
The surge in the crypto asset is helping Nigerian Bitcoin investors dodge Central bank of Nigeria (CBN) Governor Godwin Emefiele’s Opaque Foreign Exchange (FX) regime, sidestep inflation, as well as laugh all the way to the bank as Bitcoin has risen almost 300 percent this year.
“When you have a situation where people cannot easily move their money in and out of a country and the FX regime is opaque, cryptocurrencies like Bitcoin and Ether are often the go to choice,” Erik Renander a Fund Manager at HI EMIM Africa said at an investment forum held in Lagos, monitored by MoneyCentral.
A recent report by data analytics firm Chainalysis, said Russia, China, South Africa, Nigeria, Kenya, and the U.S. are among the top-ranking countries by cryptocurrency adoption, according to its 2020 Global Crypto Adoption Index.
Bitcoin has surged despite a severe crash in March that saw it lose 25 percent amid the coronavirus pandemic. Proponents have seized on the narrative that the coin could act as a store of wealth amid supposed rampant central-bank money printing, even as inflation remains mostly muted.
In addition, some Wall Street firms have taken a greater interest, with many seeking to capitalize on its gains in a world of rock-bottom interest rates. Guggenheim Partners LLC, for instance, recently said it might invest up to 10 percent of its $5.3 billion Macro Opportunities Fund in a Bitcoin trust.
Bitcoin’s cross above the $20,000 and $21,000 levels were its latest milestones in recent weeks — the coin at the end of November reached a new high three years after setting a prior peak. It had traded at a few cents for several years after its late 2008 launch by an unknown software developer in the wake of the global financial crash.
Peer coins also rose on Wednesday, with Ether, the second-largest digital asset, after Bitcoin, rising as much as 6.9 percent.
The rally follows an announcement by the CME Group Inc. that it has plans to expand its suite of cryptocurrency derivatives offerings to include Ether futures beginning in February.
For knowledgeable Nigerians, Bitcoin or cryptocurrency trading has become a solid investment haven. Africa’s largest economy has some of the biggest trading volumes for cryptocurrencies on the continent according to publicly available data.
Regulation has failed to keep up with innovation in the space however, leaving most of the public confused as to how to invest in the asset class. except a few Nigerian Bitcoin Investors.
Bitcoins market capitalisation at more than $350 billion is worth more than 8-times the entire Nigerian equity market.
What this implies is that there will continue to be retail and some institutional investors from Nigeria looking to invest in the crypto asset class due to the limited asset diversification options and depth available in the Nigerian market.