Bitcoin is on a tear in Nigeria, with the price breaking through $1,600

Bitcoin trading in Nigeria has become almost crazy. The price of Bitcoin on NairaEx, the country's leading cryptocurrency exchange, has exceeded 1600美元(as of press time, the purchase price of 1 BTC is $1,674). Considering that the average price of Bitcoin in the market is only around $1,100, this situation can indeed attract a lot of attention. Judging from the current trend of the currency price in the country, Nigerians have fully accepted Bitcoin, although no one can fully explain the reason behind this sudden surge.

Nigerian currency price trend is crazy

It is not uncommon for the price of coins in certain countries to be higher than the market average. For example, Chinese traders always have to pay a premium of more than 5%, and in India, the collision between low liquidity and high demand for Bitcoin has also led to exchanges facing the same situation. However, the development of Bitcoin in Nigeria is completely different, and the premium is higher than everyone expected.

Specifically, the current buy price of Bitcoin on NairaEx is 540,127.8 Naira (1,674 USD) and the sell price is 491,997.6 Naira (1,525 USD). In other words, Nigerian traders are willing to pay an extra $500 premium. Although this is a good sign for the development of cryptocurrencies, such a high premium makes people wonder what exactly drives such crazy prices? In addition, why has such a high premium not dampened investors' interest and reduced market demand?

Behind the crazy rise in currency prices

Not long ago, Nigeria’s Bitcoin trading volume began to grow significantly. According to data provided by Trail Blazers Nigeria, the country’s Bitcoin trading volume exceeded $1.3 million last week, which is a pretty astonishing figure. This figure only represents the trading volume in LocalBitcoins and does not include transactions on other exchanges.

There are many factors that have led to the surge in the price of Bitcoin in Nigeria, and it is difficult to explain them clearly. First of all, we have to mention the inflation problem in Nigeria. According to authoritative agencies, Nigeria's inflation rate will exceed 20% in the first quarter of 2017. Inflation has also caused large-scale demonstrations in the country. Bitcoin happens to be unaffected by the international economic situation and is an ideal safe-haven option.

Secondly, the country’s breakthroughs in the internet and technology over the past few years are likely one of the reasons for the high acceptance of cryptocurrencies. 3M is also a factor that indirectly promotes the development of cryptocurrencies because it only accepts Bitcoin payments. Although many people know that 3M is a Ponzi scheme, Nigerians continue to invest Bitcoin in this project.

Perhaps the change in attitude towards Bitcoin will start with merchant acceptance in Nigeria. Thanks to companies like BitPesa, cryptocurrencies can be used to solve daily needs. Recently, the company launched a new service that allows Nigerian businesses to transfer funds to their Chinese partners on the Bitcoin network. Efficient payment solutions can promote economic prosperity, and Bitcoin is currently moving in this direction.

Finally, local media have also taken a positive attitude towards Bitcoin. Nigeria Today recently reported an article about Satoshipay, introducing ways to make money with Bitcoin.

All these signs indicate that Bitcoin has a bright future in Nigeria. However, whether this high premium can continue remains to be seen.