The cryptocurrency market in Nigeria, as well as other African countries, has grown by 1200 percent in one year, according to a report by Chainalysis on Tuesday.
According to the report, the African region has one of the highest grassroots adoptions in the world, with Kenya, Nigeria, South Africa, and Tanzania ranking in the top 20 of its Global Crypto Adoption Index.
The report added that Africa has the third-fastest growing cryptocurrency economy, and a bigger share of its overall transaction volume made up of retail-sized transfers than any other region at just over 7 percent, versus the global average of 5.5 percent.
"Africa has the smallest cryptocurrency economy of any region we study, having received $105.6 billion worth of cryptocurrency between July 2020 and June 2021, but despite that, it’s also one of the most dynamic and exciting,” the report read.
Data also reveals that Africa has the biggest share of transaction volume made up of large retail and small retail-sized payments than other regions. The report states, “These numbers are a big part of why so many African countries rank high on our adoption index, as smaller transfer sizes suggest higher grassroots adoption amongst everyday users.”
Peer-to-Peer (P2P) transactions and platforms were analyzed critically in the report because this medium of exchange is widely used in Africa majorly because of regulations in countries such as Nigeria and Kenya which have made it difficult for customers to send money to cryptocurrency businesses from their bank accounts. These customers now switch to P2P transactions as a way to bypass the laws as are non-custodial and let customers trade cash for cryptocurrency amongst themselves.
The report reveals that Africa has been the continued growth of P2P cryptocurrency exchanges over the last year. It uses statistics from LocalBitcoins and Paxful, two of the world’s biggest P2P platforms by transaction volume. The report shows that Nigeria has been leading the charge as it takes a lion's share of the transaction volume. Year-to-Date (YTD), data from Useful Tulips revealed that Nigeria’s P2P trading volume is over $300 million on these two platforms.
It stated, “no region uses P2P platforms at a higher rate than African cryptocurrency users, as they account for 1.2% of all African transaction volume and 2.6% of all volume for Bitcoin specifically.”