Last year was an impressive year for cryptocurrencies, laying the foundation for Bitcoin’s current rally as more people learned about digital assets.
According to data researched by Trading Platforms UK, only 6% of Americans owned or used cryptocurrencies in 2020. The figure is at least five times less compared to top-ranking Nigeria at 32%. Vietnam is second at 21%, followed by the Philippines at 20%. The feedback on cryptocurrency ownership is based on 1,000 – 4,000 respondents from each country.
The analysis also estimates Bitcoin transaction volume on online exchanges across 2020. The United States tops with a $1.52 billion volume, followed by Russia at $421 million. Nigeria ranks third at $400 million. The volume is an analysis of the Bitcoin trading against local currencies by the domestic population through online exchanges LocalBitcoins, Paxful, and Bisq. Although the volume primarily shows estimates, it reflects the trend for the highlighted regions.
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Factors propelling Nigeria’s crypto awareness
Nigeria’s rise in cryptocurrency usage in 2020 is linked to several factors like the country’s economic situation alongside the high cost of remitting money. Following the COVID-19 pandemic and the Central Bank of Nigeria’s (CBN) devaluation of the local currency, more people actively considered cryptocurrencies as a form of storing wealth.
Additionally, Nigeria’s protests condemning police brutality also saw most people turn to cryptocurrencies. This is after the government targeted bank accounts of protestors and banned them while Nigerians living in the diaspora sent support to the protestors through cryptocurrencies.
One important aspect to note is the ownership and use of cryptocurrencies in Nigeria remains behind the scenes. Most crypto holders in Nigeria are not eager to publicize digital assets due to the region’s shaky regulatory framework. Interestingly, the country has several local platforms that support purchases and sales of cryptos with the national currency.
First-time investors drive Bitcoin trading volume
The Bitcoin trading volume can be attributed to first-time investors who were getting into the cryptocurrency sector. The current Bitcoin rally began in 2020, and the trading volume indicates an impressive level of new adoption and activity for the asset. Overall, much of the volume was being driven by retail investors as the fear of missing out was set due to the rally.
Following the economic crisis that resulted from the pandemic, many investors turned to Bitcoin, with the stock market collapsing during Q1 2020. During the year, the asset largely remained resilient even as the stock market collapsed globally. Developing countries like Nigeria also recorded a significant Bitcoin trading volume mainly motivated by the fact that these countries witnessed a devaluation of their local currencies compared to the dollar.
In the U.S., it was unique considering that online payment giant PayPal also allowed trading in cryptocurrencies through its primary application. This ability gave rise to retail investors who were previously facing challenges getting into cryptocurrencies.
In general, the Bitcoin trading volume reflects the asset’s movement in the highlighted countries. Over the years, more people have become aware of the asset, with regulators making efforts to define the crypto sector clearly. Worth mentioning is that some countries have recorded a significant cryptocurrency awareness, but the legal topic remains a challenge.
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