Despite the recent fall in price caused by the present crisis, Bitcoin is showing signs of bouncing back as the price rose up to N2.82 million during the weekend.
The price of the cryptocurrency took a positive turn rising by 23% from the N2.29 million recorded mid-March. The crypto is currently valued at N2.74 million (as at press time), after going down 2.83% in the last 24 hours.
Bitcoin has a long history of being volatile and affected by even the slightest occurrences. However, when Covid-19 first struck and most stocks and markets were taking a beating, Bitcoin was relatively unaffected.
When the effects of the virus later caught up, many people who had opted to store their assets in Bitcoin due to the falling market were seriously hit.
The price of the crypto-currency dropped beyond the $9,000s (N3.30 million) and $10,000 (N 3.67 million) mark where it has hovered at the beginning of the year.
However, it appears that the price of Bitcoin is on the rise again as there was a surge during the weekend. Also, the approaching Bitcoin halving and the reported increasing adoption of cryptocurrency in commerce is expected to push the rise.
In less than a month, the third Bitcoin Halving will happen. The halving is expected to increase the price of Bitcoin like it did in the previous halving.
Bitcoin halving is an event that reduces the rate at which Bitcoin is mined or created by half. This process which tends to make the cryptocurrency even scarcer happens every four years. The next one has been forecasted to happen in May 2020.
During the first halving in 2012, the number of new Bitcoins issued every 10 minutes reduced from 50 to 25 Btc. Four years later, it was from 25 to 12.5 bitcoins.
This year’s halving will drop the amount of bitcoin mined per block to 6.25. This will reduce the supply of bitcoin, while the demand for Bitcoin increases due to fiat instability caused by the pandemic.
Apart from lowering Bitcoin’s inflation rate, the shortage is expected to drive a huge spike in the price of Bitcoin.
Increasing use of Bitcoin
Following the outbreak of the novel coronavirus, some governments have changed their negative stance against Bitcoin and other cryptocurrencies. The government of Japan and Malaysia for example, have given approval for the use of cryptocurrency exchange in their countries.
China has also embraced the use of cryptocurrency. The Chinese President, Xi Jinping said that the country will explore the technology that underpins Bitcoin, and will seize the opportunities the network has to offer.
He added that China will use the opportunities blockchain offered in finance, education and healthcare.
In India, the use of cryptocurrency has spiked significantly especially during this lockdown. A crypto company, Cashaa India reportedly had an 800% increase in trading volume between March 4 and 6, after the country’s supreme court ruled in favour of crypto exchange in the country.
Also, the price of Bitcoin has been forecasted to increase following a surge in the number of companies launching products related to cryptocurrencies.
For instance, Visa has rolled out Fold, an app that offers users bitcoin rewards, in its Fintech Fast Track Program. It also plans to launch a co-branded Visa debit card that gives out as much as 10% of cash purchases with bitcoin instead of cash.
The rewards can be used to reduce cost while shopping on Amazon or commuting with Uber.
Bitcoin in Africa
In Africa, Bitcoin is also gaining traction. Global crypto trading platform, Binance has added Niara and most recently the Kenyan Shillings to the list of currencies you can trade with on its platform.
Kenya’s crypto volume is among the top 5 locally. South African crypto exchange platform, Valr has been matching Luno in trading volume and recently added a feature for instant bank withdrawals.
Africa has the highest number of Bitcoin searches in the world
With the current crisis, the launch of a product that enables the use of cryptocurrency for commerce and the financial transaction will help push the adoption of cryptocurrency.
Bitcoin in Nigeria
Cryptocurrency use is growing rapidly in Nigeria. There are several crypto startups like Bitfxt, Quidat and Cryptohub in Nigeria. They perform services ranging from digital exchange platforms for buying and selling to payment gateways, and trading education platforms.
However, the Central bank of Nigeria CBN has not recognised cryptocurrencies as approved forms of exchange. It also hasn’t received backing from financial authorities in the country.
Cryptocurrency startups like Bitfxt have however developed payments and wallet solutions than can help Nigerians trade with cryptocurrency. The Bitfxt’s digital wallet allows storing of bitcoin as well as borrowing and trading in cryptocurrencies.
The startups also issue debit cards that can be used to withdraw cash from digital wallet through bank ATMs.
Also, a Nigerian Startup, Blockstale has built Bitcoin Teller Machines (BTM) specifically tailored to allow the use of cash to buy and sell bitcoin. However, the BTM is currently only available in Ajah and does not accept
debit or credit cards like ATM.
With the current global crisis, normal fiat currencies can become inflated. The way cryptocurrency has been designed to prevent inflation makes it very desirable to many who want to preserve their assets.
However, cryptocurrency is still very volatile and sometimes unpredictable causing doubt in many who would have otherwise opted for it.
Notwithstanding, the future that cryptocurrency promises is still bright as more countries are adopting it and more companies are integrating crypto products.
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