Blockchain solutions & Consulting firm, Convexity, has released a report that gives a fresh insight into the complexities of the day-to-day crypto peer-to-peer market in Africa’s largest crypto market, Nigeria.
Peer-to-peer (P2P) markets are a popular way to buy and sell cryptocurrencies in Nigeria. These markets allow users to trade directly with each other without the need for a third party. This makes P2P markets a more affordable and convenient option for many Nigerians considering the regulations preventing them from buying and selling cryptocurrencies with easier means.
A highlight of the Convexity report is the demonstrated shift in trade volume and adoption in recent years. From occupying the third position globally in 2020 to sliding to 18th in 2021 and finally, 17th in 2022, there has been a palpable decline.
However, this can be excused considering the unfavourable atmosphere in which the Nigerian crypto industry continues to operate.
More on the Convexity report
Convexity conducted interviews and distributed survey forms targeted at key players which include founders, investors, and traders with an average of over 4 years of experience in the industry, for the report.
The report notices that despite a decline in ranking, Nigeria remains one of the most significant markets for cryptocurrency adoption in Africa.
Despite the challenges posed by regulatory uncertainties and infrastructural barriers, the Convexity report says the country still has a continued interest in cryptocurrencies.
One of the factors behind us is remittances, per the report. Nigeria is the largest recipient of remittances in Africa after Egypt, according to World Bank data. However, the high cost of sending remittances through traditional channels has made cryptocurrencies an attractive alternative, coupled with the delivery speed, which contributes to the growth of the p2p market.
Additionally, the runaway inflation that continues to go on a rampage on the country’s economy is a contributing factor. According to the report:
Cryptocurrencies have become an attractive alternative for Nigerians looking to protect their savings from runaway inflation.
Importantly, the fact that most of the Nigerian population falls within the youthful age bracket is a determining factor for its high interest. Nigerian youths have become interested in cryptocurrencies as a way to invest and transact, contributing to the adoption of digital currencies as a means of payment.
According to the report, these factors and more contribute to Nigeria’s enviable position as one of the largest markets for cryptocurrency adoption in Africa despite the restrictions from the Central Bank of Nigeria.
With the findings of the report, the factors contributing to the adoption and growth of the P2P market in Nigeria are likely to continue shaping the landscape in the coming years.
According to data from the National Bureau of Statistics, Nigeria’s unemployment rate is over 33.3% and the youth unemployment rate is over 42.5%. As unemployment, particularly among the youth continues to be widespread, young people will continue to see crypto trading as a money-making avenue.
Importantly, the recent launch and expected implementation of the National Blockchain Policy might be a pointer to the government’s willingness to continuously analyse and review its regulatory stance and with the continued growth and adoption of P2P trading, it is expected that there would be an increased financial inclusion and empowerment of individuals.
It is however important to continue studying and improving P2P trading systems to ensure that they are secure, reliable, and accessible to all.
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