Crypto adoption in Nigeria is fueled by limited access to financial services (study)

According to research conducted by KuCoin, the growing number of Nigerians investing in crypto is propelled by the lack of suitable fiat-based opportunities. The study found that more than 30 million people in Nigeria traded digital assets in the past six months.

The reasons for adopting

KuCoin’s Latest “Cryptoverse Report” discovered that 33.4 million Nigerians, or 35% of people between the ages of 18 and 60, have owned or traded cryptocurrencies in the past six months. 52% (about 17.3 million people) have distributed more than half of their wealth in the asset class. Additionally, 70% of crypto investors have pledged to increase their exposure by the end of 2022.

KuCoin claimed that one of the main reasons for the interest in the sector is the limited access to monetary services in Africa’s most populous country. Although it is one of the financial centers in the western region of the continent, vast rural areas in Nigeria lack proper banking and fiduciary opportunities.

Another reason Nigerians are diversifying their traditional assets into cryptocurrencies is to combat rising inflation. The post-pandemic situation, the energy crisis and the financial turmoil caused by the Russian-Ukrainian military conflict have also reached Nigeria’s borders. The country’s inflation rate currently stands at over 15% and millions of people have chosen crypto as an alternative store of value, KuCoin estimated.

The research further revealed that the majority of Nigerian crypto holders entered the market many years ago. By comparison, only 26% started investing six months ago, driven by the 2021 bull run when bitcoin’s price nearly hit $70,000.

Brazil and Indonesia: Leaders in Crypto Adoption

Earlier this month, a global study by digital asset exchange Gemini highlighted that Brazil and Indonesia are the top countries in terms of cryptocurrency adoption. Around 41% of respondents from both countries admitted to owning bitcoins or some altcoins.

Gemini noted that residents living in states facing significant economic hurdles are more likely to purchase cryptocurrencies as inflation protection. This is the case of the Indonesians, since 64% admitted that it was their reason to enter the market.

The figures for large economies like the US or the UK are quite different. The adoption rate is 20% and 18% respectively. Additionally, only 16% of Americans see crypto as a suitable investment tool in times of soaring inflation, while 15% of Britons believe in the concept.

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