Bitcoin Selling at 60% Premium in Nigeria Amid Cash Withdrawal Cap

• The current price of bitcoin on the Nigerian crypto market NairaEX is $38,792.
• The demand has resulted in a premium being added to the price of Bitcoin.

As the central bank of Nigeria has been actively encouraging its people to switch to digitalized currency, the price of Bitcoin premium in the country has risen to unsustainable heights. The current price of one bitcoin on the Nigerian cryptocurrency market NairaEX is 17.8 million Naira, or $38,792.

Compared to the current market price of Bitcoin, which is about $23,700 as of this writing, this is a premium of over 60%. As part of its continuous drive to speed up the transition to a cashless society, the Central Bank of Nigeria has continued to impose limitations on cash withdrawals from ATMs.

Based on Demand and Supply

Local Bitcoin exchanges may or may not have a higher price than global ones, depending on the country’s demand and supply of cryptocurrencies. Bitcoin prices in countries with an unfavorable overall attitude toward cryptocurrencies tend to be lower than their worldwide counterparts. In this instance, the demand has resulted in a premium being added to the price of Bitcoin.

The central bank announced a cap on cash withdrawals back in December, and that limit went into effect earlier this month. Starting on January 9th, people were restricted to withdrawing a daily maximum of 20,000 NGN (about $43.50) from ATMs, with a restriction of 100,000 NGN, about $217.

The action was taken days before the introduction of new Naira banknotes, which were designed to reduce inflation and money laundering. The deadline for Nigerians to trade in their old, larger bank notes for the new currency was January 24th, as set by the central bank. Reports on January 29 indicated that the central bank has extended the deadline to February 10.