The cryptocurrency exchange Kucoin released a new report that found 35% of Nigerian adults (or 33.4 million) are either holders of cryptocurrencies, or have traded the cryptocurrency in the last six months. According to the report, 52% of Nigerian cryptocurrency traders ‘allocate more than half of their assets for cryptocurrencies.
According to the report on crypto exchanges, approximately 65% of Nigerian cryptocurrency investors have converted from fiat currency to cryptocurrency using peer-to-peer trading platforms. Many financial institutions in Nigeria are following the directive issued by the Central Bank of Nigeria (CBN), February 2021, to allow crypto investors to use peer-to-peer trading platforms.
The CBN directed financial institutions to ban or freeze crypto-related bank accounts. The CBN will penalize financial institutions that facilitate transactions for known cryptocurrency entities, as shown in a Bitcoin.com News report. The directive was not the only warning given by the CBN.
The study results show that Nigerians plan to increase crypto investments despite warnings from the governor and others. According to the report:
Another important finding was that 70% of Nigerian cryptocurrency investors plan to increase their investments in the next six months.
The study by the crypto exchange points out that the plummeting value of Nigeria’s naira currency is one reason for the rapid adoption of cryptocurrency by Nigerians. According to the report, the value of the naira has declined by 209% in six years. This is why 37% invested in cryptocurrency three years ago. This is significantly more than the 6% who invested in cryptocurrencies six years ago.
Report also mentions the Covid-19 pandemic as another factor that motivated 26% of respondents to invest cryptos over the past six month.