The Bitcoin price reached well above the $20,000 mark in the past few weeks. But in Nigeria however, this price is a bargain. Because there, Bitcoin is traded at a price of more than $40,000. Why did this happen and what does it mean for the future of Bitcoin?
Where is the Bitcoin rate in Nigeria?
The Bitcoin price has a certain market price. This market price reflects how the bitcoin is valued against certain FIAT currencies such as US dollars and euros. However, this does not mean that Bitcoin can be obtained at this price in every region of the world.
Because if the demand for Bitcoin in a certain region increases massively, then the price in this region could rise sharply. Such is the case on the crypto exchanges of the most populous country on the African continent. There, the Bitcoin price reached more than $40,000, with peaks even at $60,000.
Why is bitcoin trading at up to $60,000?
The reason for the massive “value gains” of bitcoin is the demand from Nigerians. They do not want to accept the country’s new central digital currency, the eNaira. Due to the lack of interest from the population, the government has restricted cash withdrawals.
Old banknotes are to be exchanged for the eNaira by February 10th. This is causing a bit of a panic in the country, and people are looking for new ways to keep their money’s worth. Search queries for terms like “buy bitcoin” on Google have exploded in the past few days. An average price of $38,000 has been established for peer-to-peer platforms.
What does this development mean for the Bitcoin price in Europe?
We have to keep in mind that the Bitcoin course is always only an exchange rate against a FIAT currency. If a FIAT currency loses value, then of course the equivalent value for the Bitcoin also increases. This was the case most recently, when the euro reached parity with the US dollar. In this case, the dollar and euro exchange rates were the same.
Should the euro lose value in the future, the price will rise more for us in Europe than in the USA. We use the US dollar in pricing as it is the reserve currency for the entire FIAT world. The interest rate hikes by the ECB were unavoidable after the interest rate hikes in the USA.
Ultimately, we need to realize that Bitcoin has value per se and it can very well act as a store of value against a potential FIAT currency decline. A situation like Nigeria could be closer to Europe and the US than we think.
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