The volume of crypto trading in emerging countries is continually forging new highs. A new research report reveals that Nigeria is overtaking Venezuela on popular P2P channels, LocalBitcoin and Paxful. Nevertheless, the rise in volumes may not be directly correlated to onboarding on crypto and reflect a dire state of the economy.
Kevin Rooke, the crypto analyst who shared the data with us suggests that ‘Bitcoin is having a huge year in Africa.’ The data reveals that P2P volumes have risen considerably in the African nations of Nigeria, South Africa, Kenya and Ghana with more than $1 million in trading volume weekly.
The rise in Nigeria is particularly striking as it breached nearly $10 million. Rooke notes on the rising volumes,
P2P volumes keep hitting ATHs (up 2.5x since March), and Nigeria’s Naira just broke $10 million USD of volume last week. That’s more than any other fiat currency (except USD), and twice as much volume as the Venezuelan bolivar.
This is particularly striking because Venezuela has been the leading countries for Bitcoin adoption. Moreover, a separate data source for LocalBitcoins volume reveals that Paxful has been the dominant player in Nigeria.
The chart below reveals a significant increase in volumes since April dominated by Nigeria (in peach).Advertisement
As reported earlier on CoinGape, research finds that the main usage of Bitcoin in Venezuela is for the conversion to US Dollars. While this disagrees with the complete bullish argument, the rising volumes are certainly adding to the network.
COVID-19 Worsens Hyperinflation
The annual rate of inflation in Nigeria has been extremely high and is expected to be around 12-14% in the next couple of years. This is consistent with many African and South American countries.
Moreover, due to the low GPD of these nations, the high inflation rate further causes damage leading to extreme poverty and economic distress. Reportedly, COVID-19 has worsened the situation further with a lack of medical services and slow down in the global economy. This coincides with the timing of the rise in coronavirus cases.
The volume has Venezuela has risen considerably since March. However, much of the rise in the native currency volume can be offset by the rising inflation.
This because of an escape from the local FIAT currency to a much safer reserve currency, majorly, the US Dollar. P2P crypto exchange portals and OTC desk in the countries seem to be providing an efficient bridge for these economies. With the adoption of crypto for payments in the developed economies, this will further accentuate the bullish argument.
Nevertheless, that is a long-shot for now. Dealing with poverty and the economy seems to be the pressing issue for now.