Bitcoin prices are hitting an all-time high in several parts of the world, even though the USD and CNY markets are dipping slightly. Over in Nigeria, the price per Bitcoin surpassed US$1,50 earlier today. This is quite an interesting price comparison, which indicates that Nigerians are paying a hefty premium for the cryptocurrency. Bitcoin is destined to make an impact in developing regions, even though it may not be for the reasons people assume.
Nigeria Grows Keen On Bitcoin As A Hedging Tool
Similar to what is going on in India, Nigeria is a country where fiat currency is a rather strange commodity. Moreover, there is the looming threat of capital controls, forcing consumers, traders, and investors to look elsewhere. Hedging against future financial turmoil is not easy, and there are few promising opportunities available right now.
All of these factors are driving up the Bitcoin price in the country, which has spiked to well above US$1,250, all of a sudden. It appears that local exchanges struggle a bit with cryptocurrency liquidity, which enables the increasing premium price that customers have to pay. Then again, very few people seem bothered by this “problem” at this time.
Paying a premium price to obtain Bitcoin from exchanges or peer-to-peer trading platforms is not uncommon. Chinese traders always pay prices above the current market valuation. Indian consumers, who are flocking to BTC as of late, pay a hefty premium rate as well. For now, though, Nigeria takes the crown, as they paid nearly US$500 per BTC– more than the market price.
At the same time, one has to take these premium prices with a bit of salt. Just because Nigerian traders pay such a high price per BTC does not mean that the global market will follow all of a sudden. Instead, other traders may look to “exploit” these arbitrage opportunities to get more money per BTC in their hands. Anyone with the option to do so should, at least.
Another contributing factor is the low liquidity in the Nigerian market right now. Exchanges only transact a few dozen BTC per day on a good day, which means that these price spikes may only be a temporary reflection. Right now, prices have dropped to their normal levels once again, although that situation could change at any given time.
Bitcoin is in high demand all over the world, even though very few buyers will use it as a currency in the traditional sense. For most people, cryptocurrency is an investment far more accessible than precious metals, and with higher potential return rates than stocks or bonds. The more people buy Bitcoin, however, the smaller the supplies become across exchanges, and the higher the prices may become over time.
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