Connect with us

Money market

Bitcoin price crashes by 65%, adoption rate drops

Published

on

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.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Money market

Naira will continue to appreciate against dollar – Shettima

Published

on

Vice President Kashim Shettima has expressed optimism that the Naira would continue to appreciate against the dollar at the forex market.

Spokesperson of the Vice-President, Mr Stanley Nkwocha, in a statement on Saturday, said Shettima stated this at a meeting with officials of the Lagos Chamber of Commerce and Industry (LCCI), at the President Villa, Abuja.

He said President Bola Tinubu ended the fuel subsidy and ensured the unification of the multiple exchange rate because the former arrangement was producing billionaires overnight.

“Naira went haywire and some people were celebrating but inwardly we were laughing at them because we knew that we have the leadership to reverse the trend.

“Asiwaju knows the game, and truly the Naira is gaining and the difference will drop further.”

He recalled that the quality of leadership provided by President Tinubu as governor of Lagos laid the foundation for the massive development witnessed in the state.

Shettima assured that the Tinubu administration is doing its best to address challenges in the power sector.

According to him, Tinubu’s administration is aware that power is absolutely essential for development.

“We are determined to ensure that we generate jobs for our youths. Honestly, the President’s obsession is to live in a place of glory, to transform this country to a higher pedestal.

“He wants to leave a legacy, one of qualitative leadership because the hope of the black man, the hope of Africa rests with Nigeria.

“I want to assure you that President Bola Ahmed Tinubu is one of you. He understands your ecosystem. In this government, you have an ally and a friend.”

Earlier, the President of LCCI, Gabriel Idahosa, emphasised the need for the Federal Government to consider more innovations to address the insecurity challenge in the country.

He also urged the Tinubu administration to ensure a significant upswing in the pace and scale of alternative policy measures that promote credit access, stimulate investment, and support entrepreneurship.

“This could include targeted interventions such as concessional lending facilities, loan guarantees, and interest rate subsidies tailored to the needs of SMEs and key sectors of the economy like agriculture, manufacturing and power technology.”

Continue Reading

Money market

LCCI advocates discipline, export to sustain Naira appreciation

Published

on

LCCI advocates discipline, export to sustain Naira appreciationThe Lagos Chamber of Commerce and Industry (LCCI) has emphasised the importance of maintaining discipline in the foreign exchange market to sustain the steady appreciation of the Naira.

The President and Chairman of the Council of LCCI, Mr Gabriel Idahosa, made the call in an interview with newsmen on Wednesday in Lagos.

Idahosa praised the efforts of the Central Bank of Nigeria in imposing discipline, attributing the recent Naira appreciation to curbing speculative activities.

“On the monetary side, the CBN is doing it. The primary efforts should continue to impose discipline in the foreign currency market.

“The abuses in the foreign currency market were prevalent and most of the fall in the value of the Naira in the last six months is not because there was any sudden calamity in the Nigerian economy.

“It was primarily because of very reckless speculations, that people were just speculating in the dollar, they had nothing to export, nothing to import, they were just buying the dollar for speculative reasons.

“And once the Central Bank started to impose discipline in the foreign currency market, we saw the value of the Naira rising very quickly by stopping speculation,” he said.

According to him, the strategies of the Central Bank, now, are designed to achieve a sustained discipline in the foreign currency market.

Idahosa highlighted the need to continue reducing the number of Bureau de Change operators, stressing that many operated without contributing to international trade.

He applauded the Central Bank’s move to enforce documentation and identification of buyers and sellers at BDCs, aiming to deter reckless speculation and curb illicit financial flows.

On the fiscal side, Idahosa urged President Bola Tinubu to prioritise a nationwide export drive, citing it as the key to bolstering the Naira and providing essential foreign exchange.

He emphasised the importance of fostering a culture of export among Nigerians across all scales of enterprise to reduce reliance on imports and strengthen the country’s economic resilience.

Continue Reading

Money market

Foreign reserves decline to $32.29bn

Published

on

The foreign reserve has depleted to $32.29 billion, which is a six-year low in the Central Bank’s course to save the naira.

This is the lowest level the reserves have been since September 25, 2017, when it was $32.28 billion.

The country’s foreign reserves declined by 6.2 percent, losing $2.6 billion since March 18, when the naira started its rebound from record-low levels against the dollar to $32.29 billion as of Monday, based on the latest available data from the CBN.

At the beginning of the month, the reserve was at $33.57 billion, then further dipped to $32.6 billion by April 12.

This comes as the CBN has attempted to save the naira through various interventions such as raising interest rates to 24.75 percent and managing foreign exchange trades.

It stepped up its intervention in the FX market with sales at both the official market and to BDC operators who sell dollars on the streets.

The apex bank, which sells $10,000 to each BDC every week, mandated them to only sell at a spread of 1.5 percent, which comes to N1,117 per US dollar.

The rate sold by the BDCs has set a defacto floor for the naira in the black market since the apex bank resumed sales to them in February.

Also, last month the CBN said it had cleared a backlog of $7 billion since the beginning of the year. That was built over the years as the central bank pegged its currency against the dollar, leading to a scarcity of foreign currency that deterred foreign portfolio investment. However, it’s unclear how much dollar debt the CBN retains on its books.

Akpan Ekpo, a professor of economics and public policy, said the CBN’s managed float system in which it is trying to ensure supply and curtail demand is not sustainable in the long term.

He said the CBN needs to be careful with how it depletes the foreign reserves as its main source is oil revenue.

“We need to manufacture non-oil goods and services, export them, and get foreign exchange and not depend on oil income,” he said.

Continue Reading

Trending