Nigeria, Africa’s biggest economy and most populous nation, traded more than $566 million worth of bitcoin between 2015 and 2020, making it the world’s second-largest peer-to-peer (P2P) bitcoin market after the U.S., which traded $3.75 billion in the period under review.
According to an analysis of bitcoin trading platform Paxful’s database shared with news.Bitcoin.com, Nigeria has traded the equivalent of 60,215.7 BTC – more than any other country in the world. Only the U.S. exchanged more bitcoin – 535,660.3 BTC.
With trades of $55.3 million or 5,894.8 BTC, Kenya comes on as the world’s eighth most active bitcoin market and Africa’s second-biggest. South Africa traded $18.9 million bitcoin’s worth, making it the tenth biggest trader in the world and third in Africa.
Paxful chief executive officer and co-founder Ray Yussef said cross-border liquidity challenges spurred Nigeria’s BTC success: “Africa’s largest economy has problems and restrictions in sending and receiving money from inside and outside its borders.” He added that his organization’s gift cards have contributed to improving bitcoin liquidity.
Per the Paxful data, the U.S. reported a 32% decline in the number of bitcoin trades executed in 2020 while the Philippines recorded the biggest increase with 7,339% more BTC traded in 2020 compared to 2019. Vietnam’s 58% decrease in traded BTC was the biggest drop this year.
China transacted $181.3 million worth of bitcoin over the past five years, Canada $131.1 million or 15,367.4 BTC, and the UK $119.4 million (11,168.5 BTC), to complete the world’s top five bitcoin trading economies.
Paxful head of market insights Brian McCabe attributed large volumes of BTC transacted to the Covid-19 recession, which made cryptocurrency an alternative for earning income, moving money, and storing value. “There is also an analysis that there is the potential for economic pain in countries with USD denominated debt, especially emerging economies,” McCabe said.
“Countries such as Argentina who can only borrow in USD will need to repay more as their own currencies lose value to the dollar. As you can see here, most of Argentina’s debt is denominated in USD,” he explained. Argentina traded BTC worth $1, 771, 398 in 2020, recording an increase of 18, 641% since 2019.
“The problem for them is if the coronavirus continues to weaken their currencies and make the USD stronger, the money will continue to flow out of these economies and their relative debt will increase. If emerging currencies continue to experience pressure, bitcoin could once again become the alternative if people are unable to preserve wealth in their own currency,” McCabe noted.
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