Africa has one of the lowest bitcoin adoption rates in the world. However, this could soon change as countries like Nigeria, South Africa, Zimbabwe and Kenya spearhead bitcoin transactions on the continent. Nigeria, Africa’s biggest economy, is expected to witness its largest trading volumes in 2018.
Here is how Nigeria performs in bitcoin adoption rates, trading volumes and attitude toward bitcoin in 2017.
- Bitcoin trading increased by 1500% in Nigeria, only second to China. China had a bitcoin adoption rate of more than 2000%.
- Nigeria was the only country in Africa to appear in the top 20 fastest bitcoin adoption rates in the world. South Africa came in second at number 22.
- Trading volume in Nigeria is still a fraction of bigger economies. Nigeria’s bitcoin trading volume averaged $115 million in 2017.
Bitcoin trading in most African countries is lower than the rest of the world. Here are possible reasons:
Lack of Liquidity
Throughout Africa, the cost to buy bitcoins is slightly higher than in the USA and other established markets. One reason for this anomaly is that there is currently higher demand for bitcoins than there are sellers. In South Africa, for example, bitcoin trading volumes average $10 million per day.
The cost to buy 1 bitcoin in South Africa is $16,000. This amounts to $2,000 higher than bitcoin’s value as of 14, January 2018. In Nigeria, where the average trading volume per day is just about $600,000, bitcoin cost $15,500 (as of Jan 14, 2018). Last year in November, it was reported that Zimbabweans paid almost double to get hold of bitcoin on some local exchange platforms. The cost to acquire bitcoins in many African countries is becoming stable, however.
Why the High Adoption Rates of Bitcoins in Nigeria
Like South Africa, Nigeria doesn’t shy away from embracing new technologies. The country’s capital, Lagos, has often been heralded for being a tech-hub in the West African region. In addition to that, here are top reasons why Nigerians are joining the bitcoin community at unprecedented rates:
- Increase in bitcoin exchange platforms-there is over a dozen bitcoin exchange platforms available to Nigerians. Nairex is the largest and most trusted such platform in Nigeria, followed by Localbitcoins.com and Luno.
- Way to invest-similar to all other parts of the world, the bitcoin craze is common throughout Nigeria. Bitcoin’s rise in value between 2015 and 2018 has attracted hundreds of thousands of Nigerians to invest in cryptocurrencies. In 2016, Google’s bitcoin wallet in Nigeria hit more than 100,000 downloads, and may soon reach 500,000 downloads.
- Convenient payment-bitcoin’s convenience in sending and receiving funds is a great incentive to the tech-savvy in Nigeria. Currently, Nigeria receives an average of $21 billion in remittances, with remittance charges going as high as 14%. The ease to receive remittances at lower costs is pushing more Nigerians toward bitcoin adoption.
- Bitcoin’s Liquidity is increasing-Nigeria is one of a few African countries where bitcoin’s price remains stable and relative to the rest of the world. As more Nigerians buy bitcoins and more exchange platforms increase, trading volumes are expected to increase as well.
- Mobile trading-Africa may still have lower mobile consumption compared to developed nations, but they rely on mobile devices a lot more. Mobile money payment in Kenya, for example, is a multi-billion dollar investment. 15 of the top 20 countries with the highest mobile adoption rates are in Africa. As bitcoin payments become more mobile-friendly, Nigeria and other countries will likely continue to adopt bitcoin.
- Bitcoin is unregulated-bitcoin’s decentralized nature is yet another incentive for Nigerians. While the Nigerian government attempted to dissuade the adoption of cryptocurrencies in the country last year, for example, there was little they could do about it. This, in turn, means Nigerians can continue buying and selling bitcoins freely, using it as a payment network and make money by trading the digital coins.
The adoption of bitcoins in Africa may have started sluggishly, but African countries led by Nigeria, are fast rising. Bitcoin’s prices are becoming stable throughout the continent. New cryptocurrencies are launched month after month. For many Nigerians, the bitcoin movement just began. Thank you for reading this article and make sure you check out our website and find all you need to know about crypto world.