Bitcoin price crashes by 65%, adoption rate drops
The global price of Bitcoin, the most successful cryptocurrency, fell by 65.29 per cent in 2022.
This came as the adoption of digital currencies fell in a year rocked by crypto scandals, with the fall of FTX dominating the airwaves. According to data from coinmarketcap.com, the price of BTC fell from $47,686.81 as of January 01, 2022, to $16,547.50 as of December 31, 2022.
This is as the market capitalisation of BTC fell by 64.69 per cent from $902.10bn at the beginning of 2022 to $318.52bn at the end of 2022. After reaching record highs during the pandemic, with many analysts suggesting it would reach $100,000, the price of BTC took a beating in 2022.
According to Chainalysis, a blockchain insight firm, the global adoption of BTC and other cryptocurrencies has leveled off after growing consistently since mid-2019. It stated that the global adoption of crypto reached its present all-time high in the second quarter of 2021.
Despite this fall, emerging markets like Nigeria continue to dominate crypto adoption. In its ‘The 2022 Geography of Cryptocurrency Report,’ Chainalysis explained, “One trend we noted last year has only gotten stronger this year: Emerging markets dominate the index.”
It added, “Ten are lower middle income: Vietnam, Philippines, Ukraine, India, Pakistan, Nigeria, Morocco, Nepal, Kenya, and Indonesia. Eight are upper-middle income: Brazil, Thailand, Russia, China, Turkey, Argentina, Colombia, and Ecuador. Two are high income: United States and United Kingdom.”
According to the firm, the reason for this dominance is that users of crypto in countries like Nigeria use cryptocurrency to send remittances, preserve their savings in times of fiat currency volatility, and fulfill other financial needs unique to their economies.
Despite this fall in market value, BTC investment by Nigerians grew by five per cent in 2022. Paxful, one of the major peer-to-peer crypto firms, said, “Nigeria is our largest country based on trade volume.
“Trading volume in the country grew by over 5 per cent y-o-y from January through September (looking at 2022/2021 data).”
Data from the firm also confirmed that BTC trade from the nation had reached about N171.50bn ($400m) from January to June 2022.
Nigerians’ investment in Bitcoin grew by over five per cent in 2022. Recall that BTC traders were lamenting their losses because of the downturn in the price of BTC.
One trader, who asked not to be named, said, “I have been in crypto for a while. In the past few weeks, let’s say about eight weeks if anyone tells you they’ve not lost money they are lying.
“Losses are a part of this. On a personal level, and with my firm, we have lost about N40m, this is to be conservative. We are big traders. I won’t call it a loss though, because as long as you are still in the market, you will still get your money back. But on a temporary level, if we close our position now, we would be forfeiting nothing less than that amount.”
While the price of BTC has rebounded to $17,348.36 as of 5:15pm Nigerian time on Wednesday, a sense of impending doom remains.
A financial expert, Kalu Aja, on Twitter recently (Tuesday, 10, 2022) asked crypto users to withdraw their assets. He tweeted, “If you have any crypto assets staked, it will be prudent to withdraw. Yes withdraw.”
