The price of bitcoin (BTC) in Nigeria has significantly increased beyond the global market valuation amid growing demand for the asset among citizens in the West African country.
At the time of writing, BTC was trading at 17.5 million naira (approx. $38,005) on the leading Nigerian cryptocurrency exchange NairaEX. This means that Nigerians have to pay a 60% premium over the current global BTC price of $23,200.
The development comes as demand for the leading digital asset has continued to increase in Nigeria due to the government’s decision to impose limits on banks and ATM cash withdrawals in an effort to achieve a cashless economy.
In December, the Nigerian central bank imposed a weekly limit of 100,000 naira ($217) and 500,000 naira ($1,085) withdrawals on individuals and corporate organizations, respectively. The bank added that withdrawals above this limit would attract processing fees of 5% for individuals and 10% for corporate organizations.
At the same time, the regulator stated that it had set the maximum cash withdrawal per week via ATM at 100,000 naira ($217), subject to a maximum of 20,000 naira ($43) cash withdrawal per day. The policies became effective on January 9, 2023.
The withdrawal limit announcement was made days before Nigeria redesigned its currency to combat counterfeiting, discourage illicit financial transactions, and promote a cashless economy by limiting the number of new bank notes that can be withdrawn and reducing the number of dirty notes circulating in the economy.
Meanwhile, this is not the first time bitcoin has traded at a premium in Nigeria. In early 2021, when the central bank prohibited financial institutions from providing services to cryptocurrency exchanges, BTC traded at a 36% premium.
Following the Nigerian government’s move to achieve a cashless economy, thereby limiting the availability of cash, there has been a growing interest in BTC among Nigerians in recent months.
According to data from the analytics platform Google Trends, investors in Nigeria are becoming more interested in purchasing bitcoin than investors in the United States.