Hi Bitcoin community,
Being investors and economists, we always keep a check on our rate of advancement by comparing economic patterns and market indicators across different time intervals, this could be done monthly, quarterly, yearly, bi-annually, every four years or when a new administration begins. In the process, we gain a better insight on how to adapt to an ever evolving financial landscape. One of such comparison well worth studying is how Nigeria's cryptocurrency market has moved forward between the previous administration of President Muhammadu Buhari and the present administration of President Bola Ahmed Tinubu.
Under the Buhari presidency (2015–2023)In February 2021, the Central Bank of Nigeria (CBN) released a directive prohibiting financial institutions from facilitating cryptocurrency transactions. This paralyzed the official crypto financial system that governed the country, forcing the vast majority of Nigerians to switch to peer-to-peer (P2P) platforms in order to continue trading and storing digital currencies (everything was done with caution -->(one code)).
Despite this constraint, crypto adoption in Nigeria thrived. Between July 2022 and June 2023, Nigeria had $56.7 billion in crypto transaction volume, a Chainalysis report indicated. This placed Nigeria in the world's top 10–11 and 2nd on the African continent in terms of adoption. Nigeria's Central Bank Digital Currency (CBDC) e-Naira, which started in 2021, had minimal adoption, with less than 0.5% of the population using it consistently.
In total, under Buhari, crypto flourished unofficially, led by need, desperation and creativity under strict constraints and smart usage.
Under President Tinubu (2023–Present)Since President Tinubu took over office in May 2023, Nigeria has had extensive economic reforms. They consist of removal of fuel subsidies and floating the naira, leading to over 70% currency loss (Naira devaluation). The rapid devaluation forced Nigerians into seeking stable assets, and as a result, adoption of stablecoins like USDT and USDC increased as a measure to preserve the value of savings.
Cryptocurrency not only emerged as an investment tool but also as an inflation hedge when Nigeria's rate of inflation rose to over 30% during the initial months of 2024. For the period July 2023 to June 2024, crypto trading volume went up to approximately $59 billion, where Nigeria ranked #1 in Africa and #2 worldwide in terms of cryptocurrency adoption.
Though the government initially escalated its clampdown on crypto (e.g., against Binance and P2P naira pricing), it subsequently switched to regulation. The Securities and Exchange Commission (SEC) began issuing licenses to Virtual Asset Service Providers (VASPs), and a 10% capital gains tax on crypto was instituted with the 2023 Finance Act. These measures are a pivot from prohibition to regulated control.
Comparing both erasAlthough the crypto market is better developed and utilized in Tinubu's era, Nobody can dispute that the majority of investors had higher returns during Buhari's years. I don't know if I'm feeling sentimental:
During Buhari's era, Nigerians entered the market when global crypto prices (e.g., Bitcoin) were experiencing strong bull cycles (2017, 2020–2021), reaping massive USD denominated returns.
Now that crypto use is higher, inflation and currency devaluation have brought the bar/yield lower for naira based investors to achieve the same real-term returns even as trading volume has picked up.
My last ThoughtsNigeria's journey with cryptocurrency reflects its broader economic realities. Under Buhari, the industry came out of restriction and innovation. Under Tinubu, it is becoming more regulated mainstream financial option amid economic uncertainty.
While crypto adoption and usage have indeed increased, the return value available to investors is extremely timing, inflation, and regulatory-environment-dependent (strongly dependent on inflation). As always, adaptability and having access to decent information will still be essential to prosper in this mercurial market.
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