Bitcoin rises to $40,000 in Nigeria, 62% higher than in the Netherlands

Bitcoin rises to ,000 in Nigeria, 62% higher than in the Netherlands

Bitcoin is much more expensive in Nigeria than in the rest of the world. That’s because demand for bitcoin has exploded since the central bank imposed restrictions on the Nigerian naira, the local currency.

Bitcoin price 62% higher than in the Netherlands

Nigerians are currently paying a 62% premium in Bitcoin. The price of 1 bitcoin on one of the country’s largest exchanges, NairaEx, is 17.2 million naira. This amounts to no less than 34,373 euros.

Compare that to the current bitcoin price here in the Netherlands (and the rest of the world). Bitcoin is currently trading on the BLOX for $21,174.

The aforementioned NairaEx is a so-called cryptocurrency exchange, an exchange where you can place buy and sell orders. There are also peer-to-peer marketplaces like Paxful. Here, buyers and sellers act individually.

According to Paxful users, the bounty still exists higherbut we could not confirm this.

Bitcoin is usually more expensive in Nigeria

It is not the first time that Nigerians pay more for their bitcoins than anywhere else in the world. In February 2021, the Central Bank of Nigeria banned regulated financial institutions from providing local cryptocurrency exchange services.

Nigerians raised the middle finger and demand for bitcoin increased, driving the premium up to 35%.

Why is there a premium on Bitcoin in Nigeria?

This is by far a bit of speculation, but most analysts believe that the Bitcoin bounty was due to a run on ATMs. Again, this run is a result of central bank cash constraints.

From January 9, Nigerians are allowed to withdraw a maximum of 20,000 naira per day from ATMs, or about 40 euros. There are also limits on over-the-counter cash withdrawals and weekly limits on the maximum allowed.

These new rules coincide with the introduction of new banknotes.

New banknotes cause chaos

Nigerians are supposed to exchange their old banknotes for new ones. This week, the central bank extended the previously set repayment term to January 24. The new deadline for exchanging notes is February 10.

The central bank says the measures are necessary to prevent money laundering and keep inflation under control. This led people to discover Bitcoin, a form of money that cannot be controlled by a central authority.

The exchange and acquisition of new and old banknotes is chaotic. Local media wrote today that no accounts were available at ATMs or directly at the bank counter.

A Zenith Bank clerk is quoted as saying, “We don’t have new naira and we don’t pay old notes.”

The few ATMs that still dispense new banknotes charge high fees to customers of other banks. Only 5,000 naira (10 euros) per transaction can be withdrawn by customers of other banks. This makes it one chaos at ATMs:

“Banks don’t have enough of the new banknotes, so each bank sets withdrawal limits based on their liquidity. This is what we are dealing with,” says a bank official who prefers to remain anonymous.

How Much Naira Is Bitcoin Really Worth?

Alex Gladstein, director of strategy at the Human Rights Foundation, says the bounty also came about because the government misrepresented the value of the naira. It say:

“The Nigerian regime imposes a false ‘official’ value of around 450/dollar on the naira, while the street rate is 750/dollar. In reality, with bitcoin you can easily take all your money to Nigeria in a single international payment. People don’t really pay more than 40,000 in real dollars for BTC.”

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Source: Btc Direct

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