Nigeria’s crypto market seeking continental dominance
Venture capital firm EMUGO Africa believes the widespread adoption of mobile-based crypto applications, a vibrant start-up ecosystem and a tech-savvy youthful population will position Nigeria as a major player in Africa’s crypto space.
EMUGO Africa published a blog, this week, titled, Inside Nigeria’s Web3 Market: Crypto Outlook and Regulations, in which it explained that Nigeria has one of the biggest crypto currency trading volumes in Africa, and is experiencing growth, with young people accounting for a sizable proportion of traders.
In the blog, it noted that an increasing number of Nigerians are looking for a new store of value in an unhealthy economy.
"With inflation at about 29%, Nigerians are looking for alternate investments to protect and enhance their wealth. Despite their volatility, cryptocurrency offers the possibility for high returns, which is attracting young Nigerians," it stated.
The rising popularity of decentralised finance applications will also drive investors to the crypto market, wrote EMUGO, as Nigerians are drawn to the prospect of earning passive income and participating in a "permissionless" financial system.
The blog cited Nigeria’s large tech-savvy and youthful population as key for pushing cryptocurrency adoption.
The venture capital firm, focused on regional adoption of the Cardano blockchain and other Web3 technologies, claims that the emergence of cryptocurrency start-ups in Nigeria is another factor driving the country’s regional dominance.
EMUGO stated that Africa's largest country is experiencing significant growth in its crypto market and predicts it will continue to dominate the crypto landscape for decades to come.
It added: "The Nigerian crypto industry is experiencing a surge in start-ups that cater to the demands of youthful crypto enthusiasts. These firms are creating novel products and services like cryptocurrency wallets, exchanges, and educational platforms."
The blog further reasoned that Nigerians aged 18 to 34 make up 26.6% of the population, and there is a high smartphone penetration rate in this age group.
It stated: "For a present population of 226.7 million people, that corresponds to 60.3 million youths, which is greater than the total population of several countries. Despite this, Nigeria's median age is 17.2 years, compared to a continental median age of 19. This means Nigeria will continue to dominate Africa's cryptocurrency landscape in the next decades.”
The blog claimed Nigeria has the greatest smartphone penetration rate in Africa, with more than 40% of the population having a smartphone.
Global research firm Statista predicts that this will increase to 66%, or more than 140 million, by 2025.
EMUGO’s blog noted: "Nigeria has the largest internet user base in Africa, with over 120 million users. With broad internet access, young Nigerians can quickly get knowledge on crypto currencies and participate in the crypto market."
It also noted that Nigerians are enterprising entrepreneurs and will also propel the youthful population to the crypto market.
The company added: "Nigerians are known for their entrepreneurial spirit and willingness to take risks. This has led them to embrace emerging technologies such as cryptocurrency and stablecoins, which they see as potential prospects.”