More Nigerians are flocking to crypto assets to mitigate inflation and the naira depreciation.
Reports have shown that crypto adoption has continued to gain traction in Nigeria as Africa’s most populous nation struggles with rising inflation and weakening currency. Data gathered by blockchain analytics firm Chainalysis highlighted several metrics indicating that this development reflects a reaction to economic uncertainties in the country.
The volume of Nigeria’s crypto transactions rose above $56.7 billion year-over-year between July 2022 and June 2023. This change represents a 9% increase from last year. South Africa and Kenya followed, but the West African giant led by a wide margin.
Source: Chainalysis
According to the report, Bitcoin enjoyed a decent slice of this traction when prices were trending upward. How stable coins like USDT began to record a more significant portion of the market when prices plummeted. This behaviour suggests that market participants were desperate to hedge their funds against inflation and naira depreciation plaguing the country’s economic landscape. The interest in these crypto assets coincided with the most extreme naira plunge in June and July 2023.
“People are constantly looking for opportunities to hedge against the devaluation of the naira and the persistent economic decline since COVID,” Moyo Sodipo, co-founder of Nigeria-based cryptocurrency exchange Busha, said in a statement shared with the report.
Adoption rates have always been on the rise despite the government’s resistance, which seems to be softening over the years. Since May 29, when Nigeria’s newly elected president announced the devaluation and subsidy removal, citizens have endured ridiculous inflation, further aggravated by dollar-dependent petrol landing costs. The new dynamics have struggled to find balance, leaving citizens and foreign investors in more uncertainty.
Will Nigeria stop leading the adoption race in Africa at some point? Let us know your thoughts in the comment section below.
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