A recent analysis of bitcoin trading platform, Paxful’s data from Coin Dance has revealed the world’s leading bitcoin-trading countries. The Africa’s biggest economy, Nigeria, has reportedly traded bitcoins worth more than $566 million between 2015-2020, making her the second biggest Bitcoin trading nation in the world and also the biggest bitcoin trader in Africa.
The Paxful’s data from Coin Dance between 1st May 2015 and 14th November 2020 was analysed. 28 countries were considered in the dataset used which looked at the number of traded bitcoins in each country and the worth of these in US dollars. The Volume BTC contains the number of bitcoins that have been traded whilst the Volume USD contains the fiat equivalent of the bitcoin sold.
1. Nigeria is the second-largest bitcoin trading country in the world
Nigeria has traded bitcoin worth more than almost any other country in the past 5 years ($566,668,692), beating the likes of other key bitcoin nations such as China, the UK and India. Only the US has traded for a higher amount ($3,755,463,837) between 2015 and 2020.
2. Nigeria has traded more bitcoins than any other African country in the past 5 years
60,215 bitcoins have been traded in Nigeria, which is more bitcoins than any other African country. Nigeria has traded 10 times more bitcoins than Kenya which is the African country with the second-most traded bitcoins (5,895 bitcoins).
3. More bitcoins have been traded in 2020 than before in Nigeria
Despite the pandemic and the fact that the year isn’t over, 2020 has seen more bitcoin trading in Nigeria than ever before, with 20,504.50 bitcoins being traded – this is a 20% increase from 2019. The bitcoin trading industry in Nigeria was worth $213,719,383 in this year alone, which is an increase of 102% from 2019.
4. Bitcoin trading increased during the peak of the Covid-19 Pandemic
There has been an increase in bitcoin trading from January to July, with July seeing an all-year high in trading (2,664.8 bitcoins). August witnessed the highest volume of USD trading ($30,984,846). Volume of bitcoins and USD have decreased since August, with October being the month with the least total trades of bitcoins since January.
Ray Yussef, CEO and co-founder of Paxful and Brian McCabe, Head of Market Insights of Paxful have provided some expert commentary.
Why is bitcoin in such demand in Nigeria? Ray Youssef explains: “Nigeria, Africa’s largest economy, has problems and restrictions in sending and receiving money from inside and outside its borders. The lack of bitcoin liquidity was the first obstacle to solve to introduce bitcoin to Africa. Paxful enabled Nigerians to make use of an asset class (gift cards), as a way to go around financial restrictions. Now, bitcoin is flooding out of Nigeria and into other African countries because of the ambition of Nigerians’ Bitcoin community and Paxful.”
Why has so many bitcoin been traded during the COVID-19 recession? Brian McCabe says: “Simply because the recession caused by COVID-19 made people look for financial alternatives – earning income, moving money, etc. and saw crypto as an alternative.”
“There is also an analysis that there is the potential for economic pain in countries with USD denominated debt, especially emerging economies. Nearly all emerging market currencies have seen big losses vs the US dollar recently. Countries such as Argentina who can only borrow in USD will need to repay more as their own currencies lose value to the dollar. As you can see here, most of Argentina’s debt is denominated in USD.”
“The problem for them is if the coronavirus continues to weaken their currencies and make the USD stronger, the money will continue to flow out of these economies and their relative debt will increase. If emerging currencies continue to experience pressure, bitcoin could once again become the alternative if people are unable to preserve wealth in their own currency. This use case of wealth preservation in one of Paxful’s core use cases given how much of our users are in emerging markets.”
Research Credit: Paxful