Crypto News Updates

Nigerians Need Bitcoin, So Where Will The Restrictions Lead?

The massive rally in bitcoin prices has created a lot of buzz around cryptocurrencies lately, but Nigeria is one of the countries where bitcoin has been widely accepted for some time. The West African country has the highest bitcoin trading volume in Africa and recently ranked second globally of any country after the United States. According to, Nigerians have traded more than 60,200 BTC (worth more than $566 million) since 2015 through Paxful’s P2P exchange. 

Why Has Bitcoin Risen In Nigeria?

Numerous factors have contributed to the tremendous rise of Bitcoin adoption in Nigeria. One of the major reasons is stringent forex policies by the Central Bank of Nigeria (CBN). Also, a decline of the naira (the country’s fiat money) has made bitcoin appealing to Nigerians. For instance, on December 18, 2020, a communique from CBN directed deposit money banks to close all naira accounts for international money transfers operators to “ensure that all diaspora remittances are received by beneficiaries in foreign currency only.”

Nigerians have resorted to seeking alternative currencies due to dollar scarcity caused by the stringent banking laws. In fact, bitcoin adoption has grown significantly in other countries that have experienced diminishing confidence in national fiat currency and rising inflation, such as Zimbabwe. 

In Nigeria, the bitcoin trade has increased by 19 percent annually from 2017 to 2020, with 2020 recording the highest volume (20,504.50 BTC). During the lockdown, the bitcoin trade increased by 30 percent, with the peak of the pandemic recording the highest volume. According to CoinDesk, new account registrations for Paxful increased by 137 percent  between January and September 2020. The increased popularity of BTC is also evidenced in the gambling industry, with many bitcoin casino sites operating in Nigeria that are often located overseas.

A Looming Bitcoin Ban

While bitcoin and some other cryptocurrencies are decentralized, CBN is cracking down on their trade. On February 5, 2020, cryptocurrency enthusiasts in Nigeria received shocking news. CBN issued a reminder to all regulated financial entities that they were prohibited from facilitating businesses involved in cryptocurrency transactions. Therefore, transacting bitcoin is essentially prohibited. 

CBN initially banned the provision of financial services to cryptocurrency exchanges in 2017. However, it allowed banks to facilitate customer exchange, provided they met certain requirements. The latest directive seems to make facilitation completely illegal. By regulating cryptocurrency transactions, the central bank aims to take more control of the international payment system.

The young and tech-savvy generation of Nigerians are using bitcoin to maneuver around the restrictive monetary and banking system. As such, P2P exchanges are the most popular methods of trading bitcoin. These decentralized platforms connect buyers and sellers without the need for third parties. This means that bitcoin traders can circumvent government regulation. 

Niara Instability

Meanwhile, the Nigerian naira has experienced divergent exchange rates leading to increased instability and uncertainty. As a result, the financial authorities are now putting in measures to shield the naira and micromanage foreign exchange supply. Due to these restrictions, bitcoin is considered a suitable alternative for international transactions. 

Numerous, easy-to-use bitcoin exchange platforms have accelerated the adoption of bitcoin in Nigeria. The most popular platforms include Binance, Paxful and Luno. As per Bitcoinke, Paxful is currently the leading P2P exchange platform in the world, controlling about 52 percent of the global market share. Local platforms such as BuyCoins, Busha and Quidax are also quite popular. Besides these platforms, some people transact using informal channels such as WeChat, WhatsApp and Telegram.

With about 1.3 million accounts, Nigeria forms about a quarter of all registered accounts on Paxful. According to Nne Nwachukwu, the Paxful Nigeria regional manager, Nigerians mostly use the platform for peer-to-peer and arbitrage trading. A significant number also use local platforms for remittances.

Local apps such as BuyCoins allow Nigerians to buy and sell bitcoin using Nigerian debit cards. Many freelancers and expat Nigerians use BuyCoins, which processed transactions worth $140 million last year.

The central bank has not clearly defined the reason for the ban, listing only vague concerns about cryptocurrencies’ use in illegal activities. However, the ban may be due to the asset class’ dominance over the country’s fiat economy. Currently, assets worth about $4 billion are embedded in cryptocurrencies in Nigeria.

#EndSARS Protests And Bitcoin

According to CBN, the ban was instituted in good faith. To be specific, the central bank claimed that it wants to protect Nigerians from the speculative market. However, critics believe that the ban is associated with the recent #EndSARS protests against police brutality. Also, the government may believe that digital currencies are used to fund terrorist groups such as Boko Haram.

The protestors and aid groups resorted to accepting donations in bitcoin because the government restricted their access to financial services.

As noted above, last year, CBN issued a directive instructing banks to close all accounts that receive money in foreign currencies. This has affected people living in the diaspora, sending money home, as well as freelance workers who accept payments in foreign currencies. 

Diaspora remittances are restricted only to domiciliary accounts. This type of account limits Nigerians to receiving payment in foreign currencies and exchanging them for naira. However, operating these accounts comes with strict measures, such as $100 minimum deposits and the requirement of multiple references. 

But, that is not all. Since mid-2020, banks have limited the amount of money that Nigerian people can spend using their debit cards. Typically, banks are limiting withdrawals to $100. The reduction was necessitated by the shortage of dollars caused by a decline in oil prices, the country’s main export. People who want to import items or buy dollars have resorted to using bitcoin. 

Where Things Will Go

A group of senators has already opposed the CBN order. In fact, they have summoned the central bank to expound on the latest development. However, some senators support the CBN directive, claiming cryptocurrencies have rendered the naira almost useless. Also, the Nigerian securities and exchange commission has endorsed the CBN directive.  

CBN has taken issue with cryptocurrencies’ volatility and opaqueness. Other countries, like the U.S. and UK, also appear to be clamping down on cryptocurrencies. The Financial Conduct Authority (FCA) has banned the sale of cryptocurrency derivatives to retail investors to protect rookie investors from sudden and unexpected losses. 

Many African countries, including Kenya and Ghana, do not recognize cryptocurrencies as a form of currency because they are hard to regulate. After Nigeria’s ban on cryptocurrencies, many African countries — such as South Africa, where bitcoin is widely accepted — are probably monitoring the development closely. Other central banks in these countries will most likely move into action to protect local fiat currencies by banning cryptocurrencies as well.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Nigerians Need Bitcoin, So Where Will The Restrictions Lead? appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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Bitcoin Investment In 2021: What Should We Expect?

The bitcoin price has surged about 300 percent over the last 12 months thanks to mainstream adoption and institutional interest. It has rallied massively to surpassing all-time highs of $41,000. At the time of this writing, the price is hovering around $35,000 and it will be interesting to watch traders’ reactions and price behavior for the rest of 2021.

The Bull Run Will Likely Continue

Bitcoin’s bull cycle will likely continue, especially in the second half of 2021. One of the causes of price increase will be widespread adoption. Currently, relatively few people accept and use Bitcoin in everyday life. However, we could see mainstream acceptance in the coming months. For instance, PayPal has allowed its users to buy and sell bitcoin using PayPal accounts. Also, Square invested $50 million in bitcoin. Ongoing mainstream adoption like this could boost bitcoin’s price significantly.

The liquidity in bitcoin has been a telltale sign that more institutional bodies are at play. Similarly, throughout 2021 the institutional interest is expected to drive the prices of bitcoin and other cryptocurrencies. 

In another sign of the mainstream growth of cryptocurrencies expected in 2021, major cryptocurrency exchange Coinbase is expected to become a publicly-listed company this year. The exchange’s institutional assets increased from $6 billion to a whopping $20 billion between April and November of 2020.

Caused by the U.S. dollar’s cyclical bear market and global liquidity, bitcoin will benefit significantly from people hedging against inflation. Many retail traders will also jump in due to the fear of missing out (FOMO), pushing the price further. Traders who will not want to invest directly in bitcoin will trade contracts for difference (CFDs) on bitcoin via forex brokers and trading platforms.

Institutional Interest

As mentioned above, in October 2020, PayPal announced that it would support buying and selling cryptocurrency. Also, other Institutions and Wall Street giants have shown interest in cryptocurrency. For instance, JPMorgan Chase & Co. and Citibank are predicting a bullish bitcoin market. According to a leaked report from Citibank, the analysts refer to bitcoin as 21st century gold predicting that it could hit $318,000 by the end of 2021. Likewise, Will Woo, a former partner at Adaptive Capital, has referred to $200,000 as a conservative price.

A note to institutional clients from Tom Fitzpatrick, the global head of CITIFX, leaked on Twitter. The note showed a chart of three bitcoin bulls in the last decade. He suggested that the bitcoin rally could hit a peak of $318,000 in December 2021. However, other analysts such as BTIG and Bloomberg have been more conservative, predicting the price will reach $50,000.

Fiat Fiscal And Monetary Policies

Fiscal policy and monetary policies aiming to devalue currency will work in favor of the bitcoin price. Much of the demand will come from investors who fear that the money printing will devalue conventional money. With fiat money growing out of control, bitcoin is seen as a fixed asset, just like gold. 

Besides a weak monetary policy, the dollar could also be affected massively by the COVID-19 vaccine rollout. For these reasons, the demand for bitcoin might increase significantly.

Pullback Could Happen

While cryptocurrency proponents are exuberant, there is a possibility that bitcoin prices won’t rise beyond the all-time high set in 2020. In fact, the price may fall back and remain below this mark for some time, as was the case during the 2017 rally. Some believe that the only time bitcoin is likely to reach another significant high is in 2024, following the next mining subsidy halving. 

Bitcoin’s popularity as digital gold is spreading fast. However, unlike gold, bitcoin is experiencing its first global crisis, caused by COVID-19, as it was born in 2009 following the 2008 financial recession. The 2020 bear run in the market saw investors sell equities for cash. Even gold, which is considered by many to be a safer investment than bitcoin, dipped in March. Bitcoin crashed hard in mid-March too, but the bitcoin case was different. The cryptocurrency bounced from the bottom a month later in a bull run that continued until the end of the year.


Regulators have been scrutinizing digital currencies for years. Some people, albeit only a few, are using cryptocurrencies to engage in illegal trades and with the surging value of cryptocurrencies, governments around the world will be looking closely at the market. For instance, a lawsuit by the U.S. Securities and Exchange Commission (SEC) against altcoin project Ripple saw XRP prices fall by almost half. 

Regulatory agencies could suddenly erect a hurdle to tame unscrupulous activities surrounding bitcoin, but this regulation couldn’t affect bitcoin’s bullish run significantly.

Competition From Central Banks And Big Tech

Transactions involving different fiat currencies can take days and involve heavy fees and a global digital currency could significantly streamline this process in 2021. While bitcoin adoption is growing, the cryptocurrency could face competition to solve this problem from big tech. A good example is Facebook’s digital currency and, while Facebook diem is quite different from Bitcoin, it may draw some attention away from bitcoin in 2021.

Likewise, central banks are also competing against bitcoin. As reported by Banks for International Settlements, 80 percent of central banks are on the verge of developing some form of digital currency. For instance, China is working toward the adoption of a digital yuan. In many critical ways, these central bank digital currencies will be vastly different than bitcoin.


In general, the adaptation of bitcoin in commerce is a perfect cause for price increases in 2021. While bitcoin’s price and adoption is expected to proliferate, we can’t rule out the opposite and volatility is certainly possible.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Bitcoin Investment In 2021: What Should We Expect? appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

Crypto News Updates

How The Use Of Bitcoin In Africa Continued To Grow In 2020

2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.

The shift toward the adoption of bitcoin and other cryptocurrencies in Africa did not take off until 2014. That was when Bitcoin exchanges and transactions kicked off, with adoption led by Nigeria. Since then, the number of Bitcoin users and transactions done in bitcoin and other cryptocurrencies has exploded. 

At no time in history has the use of Bitcoin in Africa been so frequent as it is today. Bitcoin has thrived in Africa, and 2020 has been a breakout year for Bitcoin in the continent. But where exactly was Africa coming from before this surge and where is it headed in 2021 and beyond as far as Bitcoin usage and adoption is concerned?

The Response Of African Governments To Bitcoin

As far as technology is concerned, Africa has not been the world’s center of innovation. Africa has usually tended toward slow adaptation to change and adoption of new technologies. Once adoption sets in, though, it tends to explode and outstrip the usage of the same technologies in other climes. 

However, governments in Africa have traditionally been apathetic toward new technologies. They tend to lag in harnessing their potential and generally leave the ecosystem’s development for these emergent technologies to the populace. 

This has been the story of Bitcoin and cryptocurrencies in Africa, as governments in the continent have been very slow in understanding or harnessing the potential of distributed ledger technology. Indeed, some African governments tend to view emergent technologies with suspicion. Such has been the case with Bitcoin. 

We can also see a similar pattern being used by the African governments in cases of forex trading, which is basically regulated only in South Africa by the Financial Sector Conduct Authority (FSCA) and newly in Kenya by the Capital Markets Authority (CMA). No other African countries have shown any significant interest in regulating this field of business, despite its continued growth in all African countries.

Many central banks have issued warnings about using bitcoin and other cryptocurrencies, even when no express laws or regulations are banning their use in those countries. Perhaps it is apt that this is the case; without centralized direction, the African population is now driving the decentralized use of bitcoin and other blockchain-based products.

What Drives Bitcoin Adoption And Use In Africa?

Perhaps the primary reason for the heavy usage of Bitcoin on the continent is the need to power transactions outside of the traditional banking system. Banking laws in Africa tend to be elitist, restrictive and do not make for the general populace’s effective participation. That is why many African countries have large unbanked populations, which has made mobile payment systems and many fintech apps that aim to drive financial inclusion runaway successes. 

Access to foreign exchange for trade and international transactions is another factor that has driven Bitcoin usage through the roof. In countries like Nigeria and South Africa, where strict controls over foreign exchange movement across the banking system are in place, those involved in international trade are now turning to Bitcoin to facilitate their cross-border deals. 

In 2020, Nigeria was faced with a severe shortage of foreign exchange and was forced to cap international transactions done on point-of-sale terminals and ATMs outside of the country using the local ATM cards at a monthly limit of $100. Small scale importers that typically shop from Alibaba and other trade sites had no option but to seek alternative means of doing business. Bitcoin was a ready alternative, accepted by both shopper and vendor.

Africa can also be said to be on the fringes of the global financial system. Complete access to international online payment systems such as PayPal is restricted. South Africa is the only African country where users can pay and receive payments on PayPal. This situation has driven the need for the development of alternative payment systems. By a mistake of design, a globally-accepted payment means such as Bitcoin that can be converted to fiat in many countries has stepped in to fill this gap. 

Bitcoin Usage And Adoption In Africa In 2020

The ownership, usage and volume of trades in bitcoin and other cryptos saw a massive surge in Africa in 2020. Nigeria, South Africa and Kenya led the charge in this regard and feature among the top-ten countries where Google searches about crypto are highest. 

In Nigeria, most of the previous usage of Bitcoin was dominated by small-scale, peer-to-peer (P2P) traders, looking to buy and sell bitcoin for other cryptocurrencies and fiat currencies using escrow-based exchanges or face-to-face transactional modes. 2020 brought an evolution of the situation. International traders, importers and exporters seeking to bypass the Central Bank of Nigeria’s foreign exchange controls have found Bitcoin as a suitable alternative. 

Kenya’s advancements in mobile payment systems have given it an edge over other African countries in terms of using alternative payment systems for e-commerce transactions. The coming of Bitcoin has seen Kenya increasing that edge. A BBC report indicated that the acceptance of cryptocurrencies for commercial payments in Kenya has surged. According to data from Paxful, cryptocurrency transaction volumes on its exchange from Kenya grew 400 percent compared to the same period last year. Recognizing Kenya’s cryptocurrency market’s potential, the tax authorities there have introduced a digital tax to enhance the government’s revenue.

What Does This Mean For Bitcoin In Africa In 2021 And Beyond?

Major players in the distributed ledger technology space have noticed the growth of the ecosystem in Africa. Several cryptocurrency exchanges are either setting up shop in several African countries or merging with smaller domestic players to increase their footprint. 

Binance has established a significant presence in Nigeria, and South African exchange ChainEx attracted funding interest from Malta-based exchange OKEx. M-Pesa, which had runaway success in Kenya’s mobile money market, is in Ghana with its BitPesa exchange. These are just a few of several emerging partnerships in the crypto space in Africa.

The United Nations has also identified Africa as the next frontier for cryptocurrency adoption and usage. P2P transactions are expected to grow in 2021. A June 1, 2020 research document published by Bitcoin KE identified Africa’s P2P market as worth over $54.8 million, with Nigeria dominating the space with $35.5 million in transaction value as of June 2020. Nigeria will retain its dominance in the P2P space. 

Kenya is expected to lead the charge of cryptocurrency use for the purchase of goods and services. South Africa remains the top destination for the trading of cryptos as derivative assets on exchanges. 

Meanwhile, Seychelles is an African island in the Indian Ocean that will build on its previous reputation as one of Africa’s financial trading hubs. It is positioning itself as a hub for developing blockchain projects, much like Malta and Switzerland. 

Africa looks set to witness even more explosive growth in use and adoption of bitcoin and other cryptocurrencies in 2021 and beyond.

This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post How The Use Of Bitcoin In Africa Continued To Grow In 2020 appeared first on Bitcoin Magazine.

Source: Bitcoin magazine