News JVTech Bitcoin back at $37,000? This scenario is already a reality in this country
While a bitcoin trades around $20,000 worldwide, residents of this country have to spend almost double the price to get a BTC. Why is bitcoin trading currently $33,000 so much more expensive in this country?
Bitcoin back 37,000 dollars in Nigeria
The crypto winter continues to weigh on Bitcoin, but Nigeria does not appear to be experiencing the crisis. In fact, Bitcoin has only experienced a bullish rally in this country since the beginning of this year. Specifically, Bitcoin rose from $20,000 to around $37,000 within two months.
According to the Quidax cryptocurrency buy and sell exchange, BTC would have dropped to 16 million naira or $33,000. This is still more than 60% compared to global crypto prices. So how can this great thaw be explained?
This price, which is significantly higher than the true price of Bitcoin, is the result of a very specific situation in Nigeria. Nigerians face great difficulties in accessing international crypto exchanges like Binance or others. They are therefore usually forced to turn to local crypto platforms. Therefore, due to strong demand and a much more limited supply of Bitcoin than on an international exchange, the price of Bitcoin is inexorably increasing.
When this type of decorrelation occurs in an asset or crypto, it generally doesn’t take long for the price to normalize again. Specifically, some experienced traders take care of arbitrage. In idea, this opportunity would allow sellers from another region of the world to sell their bitcoin bought for $20,000 in Europe for $37,000 in the Nigerian market. In short, this process brings in supply, which helps drive down the futures price.
In Nigeria, however, bitcoin has been at its all-time high for the past few weeks. This is due to the complexity for foreigners to access local platforms to sell their bitcoins. Because of this, the price in Nigeria is not moving and could even keep going up for several reasons.
Nigeria, a pro-bitcoin country
The country is currently in a context of high inflation and the population tends to protect themselves from the surge by betting on bitcoin.
Additionally, Nigeria is currently pursuing a restrictive monetary policy aimed at capping naira withdrawals in the country. Thus, residents are limited to 20,000 NGN per day or 40 dollars. For this reason, Bitcoin appears as an alternative to local currency. Especially since the first cryptocurrency is widely accepted as a means of payment among the population.
Due to these various reasons, interest in Bitcoin continues to grow in the country. In addition, this phenomenon can be felt in Google searches, as Nigerians dominate the mention “buy bitcoin” (buy bitcoin) compared to other countries.