The number of Nigerians who own cryptocurrencies has increased this year despite the downturn in the market in recent months.
Finder’s latest report on cryptocurrency ownership and adoption shows that Nigeria has the second highest number of Bitcoin owners as of October at 48 percent, up from 16.1 percent in the same month last year. Australia sits atop the table, with 61 percent of crypto owners holding Bitcoin, the world’s most popular cryptocurrency.
Finder’s Cryptocurrency Adoption Index measures the growth of cryptocurrencies worldwide through an ongoing survey of internet users in 26 countries.
A report by Coingecko, a global crypto market platform, showed that Nigeria beat other global counterparts surveyed to emerge as the country with the highest search ranking in crypto since the bear market in April with more than 371 key search phrases.
The value of cryptocurrencies has plunged in recent months, with the price of Bitcoin falling from as high as $69,000 per coin last year to below $20,000 in May 2022. It traded for $20,075.50 at 5:30pm Nigerian time on Tuesday, compared to $63,277 a year ago. The crypto market crash also saw the value of Ethereum and Cardano plummet.
Financial analysts and crypto traders who spoke to BusinessDay highlighted reasons why Nigerians, especially youths, remain resilient in the crypto space despite the market downturn.
Raphael Idu, a financial market analyst for CT Traders, said there is more beyond investing in crypto, adding that Nigerian youths, known for leveraging opportunities on the internet, are tapping into other areas of cryptocurrency.
“We have crypto investors and we have traders. The difference is that everybody involved in the crypto market are investors but not everyone is a trader,” Idu said.
“The crash of the crypto market doesn’t only bring negative effects but has its positive sides too. When there is a crash in the market, traders tend to trade towards that direction and make money from the crash, but investors lose money because they don’t know how to trade the market movement.”
According to Idu, Nigerian youths are more interested because they believe in the platform’s ability to change within a short period if traded properly.
“The market has bearish and bullish seasons. Many youths, especially Nigerians, understand the market very well,” he said.
Henry Izuchukwu, a crypto trader, does not think it will be easy to erase cryptocurrency from the mind of an average youth in Nigeria.
He said, “We have seen people rise to fame and wealth through the platform.
“The ban in the country and the current nature of the market changed nothing because once it rebounds, it will be back with another life-changing opportunity, bringing more youths to the millionaire club.
“I will say it is a movement that will be difficult to stop and that is why a lot of stakeholders in the blockchain space are advocating and engaging the federal government to see reasons for it.”
Goodluck Ezinwa, a cryptocurrency investor, said the market crash is part of the market orientation.
He said: “Most of us have our investment there and are also investing aggressively. No matter how long the crash stays, it will stabilise and fall back to profit.
“I know people that have tripled their investment despite the bearish nature of the market and once it rises a bit up now, it will be in their favour and that is one advantage crypto has over most of the other digital assets. It gives that confidence, even in bad times.”
Emmanuel Iwu, an investor, said there are crypto jobs too because crypto itself is a business. “All these coins are owned by people who benefit when it is doing well.”
According to Iwu, they always employ many workers who advertise and market their products for them. Each coin has its own groups, telegram, discord server and others containing people that work for them and get paid on a monthly and weekly basis in crypto too.
Iwu said some Nigerians buy Tether (USDT), a cryptocurrency pegged to the US dollar. “One USDT currently is equal to one dollar and you see how it is rising. As of last year, it was N500 to buy but as of today, it is currently N762, which will also be recorded as crypto transactions. Not everyone is into those coins that rise and fall. We have stablecoins that give interest.”
He said another factor driving Nigerians’ interest in cryptos is the mindset that it is better to buy now that the market is down so that there will be more profit when it goes up.
“What we are experiencing now is what is called a dip, and a lot of people believe in buying coins and investing in the dip, which might even triple when the market rebounds,” he said.