Bitcoin has reached new record highs in Nigeria as the Naira continues its dramatic slide against the U.S. dollar.
With the local currency hitting an all-time low, more Nigerians are turning to Bitcoin to protect their wealth.
This shift reflects a larger trend in the country, where digital assets are becoming a popular alternative in uncertain economic times.
The Naira, Nigeria’s official currency, recently hit a historic low of 1,670.65 NGN to one U.S. dollar.
This steep decline is part of a broader economic crisis affecting Nigeria, which has seen a sharp drop in its dollar reserves.
The country’s dollar liquidity has fallen by 72%, now standing at just $81 million.
With the economy struggling and the Naira weakening, Bitcoin has emerged as a preferred choice for Nigerians looking for stability.
As of early November 2024, Bitcoin reached an unprecedented price of 120,123,379 NGN, far surpassing its previous record of 26 million NGN set in 2021.
The surge in Bitcoin’s value in Nigeria is not just about numbers; it represents a significant shift in investment habits.
More Nigerians, especially young people, are seeing Bitcoin as a viable store of value.
One local investor, Kola Adebayo, explained why he turned to Bitcoin.
“With the Naira falling so fast, I needed a way to protect my savings,” he said.
“Bitcoin has been my solution. It’s risky, but in this economy, so is everything else.”
Nigeria has been heavily reliant on oil exports, which make up a substantial part of its foreign exchange income.
However, with the global shift towards renewable energy and fluctuations in oil prices, Nigeria’s oil revenue has been unstable.
This has intensified the pressure on the Naira, which depends heavily on foreign currency inflows.
According to financial analysts, Nigeria’s dependence on imports and its shrinking dollar reserves are the primary factors behind the Naira’s fall.
Economist Adamu Suleiman commented on the current crisis.
“Nigeria’s economic situation is very challenging,” he said.
“With low dollar reserves and high import costs, the Naira has lost its stability. People are understandably turning to alternatives like Bitcoin.”
The rising interest in Bitcoin in Nigeria is also fueled by the country’s young, tech-savvy population.
Nigeria has one of the largest populations of young people in Africa, many of whom are familiar with digital technology and cryptocurrency.
Local cryptocurrency exchanges have reported significant increases in Bitcoin trading volumes as Nigerians rush to buy the digital currency.
This trend has also been driven by a growing sense of distrust in traditional financial institutions and concerns over inflation.
A recent report by Chainalysis ranked Nigeria among the top countries for cryptocurrency adoption worldwide.
The study highlighted how Nigerians are using Bitcoin not just for investment but also for remittances, trade, and even daily transactions.
Despite Bitcoin’s popularity, its rise has not come without challenges.
The Nigerian government has repeatedly expressed concerns about cryptocurrency, citing potential risks.
In 2021, the Central Bank of Nigeria (CBN) banned financial institutions from providing services to cryptocurrency exchanges, sparking controversy.
CBN Governor Godwin Emefiele explained the decision at the time.
“We have serious concerns about cryptocurrencies being used for illegal activities,” he said.
“We must protect Nigerians from the potential risks associated with these unregulated assets.”
However, the CBN’s stance has done little to curb the demand for Bitcoin in Nigeria.
Instead, Nigerians have turned to peer-to-peer (P2P) platforms to continue trading Bitcoin outside the traditional banking system.
One Bitcoin trader, Aminu Bello, shared how the restrictions have affected him.
“When the banks blocked crypto transactions, we just moved to P2P,” he said.
“It’s actually easier now because there’s no middleman. We deal directly with each other.”
The CBN has since softened its approach, introducing the eNaira, Nigeria’s official digital currency, in 2022.
The eNaira was designed to offer Nigerians a safer, government-backed alternative to Bitcoin and other cryptocurrencies.
However, the eNaira has struggled to gain traction, with many Nigerians still preferring Bitcoin due to its decentralized nature.
