Ownership of cryptocurrency is depreciating in Nigeria amid a meltdown in the cryptoasset market and clampdown by banks on holders of the decentralised finance currency.
According to Finder Cryptocurrency Adoption Index, as of December 2021, its survey disclosed that 21% Nigerian adult internet users now hold cryptocurrency, down from 24% ownership in October.
Among the 2,350 Internet users surveyed in Nigeria by December 2021, breakdown of the crypto ownership further reflected the investment appetite among men and women in the countries, with the former accounting for 58%, while the latter held 42% of the crypto circulated among Nigerians.
This is not surprising considering out of the surveyed Nigerian Internet users, 81% believe cryptocurrencies to be good investment – blazing past the global standard of 43% – even though 73% of Nigerians are familiar with the digital currencies.
How Nigeria ranks in global ranking?
Regardless of the dwindling ownership rate, Nigeria remained on the top ten cryptocurrency adoption, ranking sixth out of 27 countries surveyed, behind Vietnam (29%), India (23%), Australia (23%), Indonesia (22%), Philippines (22%).
Nigeria is well ahead of western countries, Canada (13%), Ireland (12%), United States (10%), Germany (8%), United Kingdom (6%), as well as its African counterparts, Ghana (17.31%), Kenya (15.78%) and South Africa (11.26%).
Dogecoin rising against Bitcoin and Ethereum in Nigeria
Not diverting from the global sentiment trailing bitcoin, 21% Nigerians who own cryptocurrency embraced BTC at a rate of 41.2%, ahead of ETH which accounts for 25.1% of the hold.
Elon Musk-favoured crypto, Dogecoin, was the breakout sensation among Nigerians, holding the third position on the most popular cryptoasset, ranking with 20.1% ahead of veterans Solana, Cardano and Ripple.
Why is cryptocurrency losing grip among Nigerians?
Nigerian crypto adoption pipe busted: In November, there was a fresh crackdown on holders and traders of cryptocurrency in Nigeria, with Zenith Bank, GTBank, FCMB and Kuda Bank leading the Central Bank of Nigeria (CBN) effort to sweep out crypto from the financial system.
Bank accounts believed to be involved in the digital currencies are shutdown by the commercial and digital banks, with clampdown extending to accounts recording excess inflow and outflow.
Ripples Nigeria had reported the bank’s onslaught against the crypto holders who the CBN governor, Godwin Emefiele, had described not to be credible investors during his defense of the ban of bitcoin and other altcoins.
Despite losing a court case against investment company, Riseinvest, Chaka, Bamboo over restriction on their accounts relating to cryptocurrency, CBN has doubled down on its belief that cryptoassets are fraudulents.
However, the court had announced that the CBN doesn’t have the power to ban cryptocurrency, as its ban circular isn’t backed by the constitution of Nigeria.
Nevertheless, the banks clampdown has served as an albatross to the growth in adoption of digital currencies, making it difficult for prospective investors to buy into the momentum and enter the crypto market.
This is reflected by Paxful data which showed trading of the most popular cryptocurrency, bitcoin, fell from over 6 million in July to 2.8 million volume in November’s first week, representing 53.3 percent decline in volume of trading among Nigerians.
Policy makers vs Cryptoassets: Since bitcoin, Ethereum hit their All-Time High in November, the cryptocurrency market has been shedding its gains to depreciate by 14.6% in market capitalisation between October ending and December 31, 2021.
The market lost $387.30 billion during the two months period, as various governments’ policies across the world against the cryptocurrency scared investors out of the crypto bracket.
Nigerian bank clampdown and China’s decision to shutdown crypto miners business and close digital currency exchanges, and Russia weighing ban options sent shock wave in the crypto community.
This dragged down adoption, with sell off pulling down the value of coin like bitcoin to $46,306.45 as of December 31, 2021, from it’s highest level of $68,789.63 recorded November 10, 2021.
Bitcoin now trades at $37,957.51, 44.8% below the All-Time High, losing $30,832.21 in three months, hence, the sell off overshadowing FOMO (fear of missing out) – which had previously encouraged adoption – among Nigerians who are also battling fear of bank crackdown; consequently depleting ownership of cryptocurrency among holders in the country, who don’t want to loss their investment.
Meanwhile, the cryptocurrency capitalisation has depreciated by 33.30% from October ending to date, losing $879.43 billion from the market cap which settles at $1.76 trillion as at the time of filing this report, against the $2.64 trillion reported October ending.
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