Barely two weeks after the Central Bank of Nigeria banned the activity of cryptocurrency traders in Nigeria, we’re now seeing a trend of Bitcoin trading at a premium in Nigeria. While BTC is up 79% year-to-date, in Nigeria, the value is going through the roof.
The effect of the CBN’s ban on crypto exchanges has been an increase in the public’s interest in BTC. Nigeria accounts for the majority of BTC’s trading volume on the continent and what the ban has done is to put a premium on BTC prices.
As at February 17, BTC was trading at a 36% premium in Nigeria. In simple terms, while BTC is valued at $51,000, in Nigeria, that value is around $71,000.
Nigeria’s BTC premium is also one of the highest globally by a large margin; in South Africa, the premium is 3.2% while countries like Malaysia and Argentina have premiums of about 1%. What it shows is that Nigeria now has an established cryptocurrency culture and there’s little a CBN policy can do to reverse that.
In Nigeria, what we’re seeing is that the exchanges are working around government regulation with p2p trading options. It is in line with the thinking that bans do not work; instead bans make the black market stronger and only end up driving up prices.