Bitcoin Nigeria: Fear of missing out (FOMO) turns to Oh my God (OMG)
Young Nigerian entrepreneurs trying their hands at trading Bitcoin got a panic attack this week with the big somersault of Bitcoin prices. Just a few months ago, it seemed Bitcoin could do no wrong.
Despite the Central Bank ban on Bitcoin transactions at the banks, crypto trading, especially by young Nigerians has been booming and kept many of them awake at night.
The mood in the market was FOMO (Fear of missing out). This led many Nigerians to joining the pack. It now seems this exuberance is turning to regret.
Now, crypto is in freefall, with the price of Bitcoin falling to a six-month low below the $38,000 mark — a 50% crash from its record high in November.
Prior enthusiasm is turning into malaise: The number of active addresses — a measure of trading activity — has slid to about 760,000 from almost 1.2 million on Nov. 9 — the day before Bitcoin peaked, according to CoinMetrics data compiled by Messari.
There are plenty of reasons for the downturn, including signals from various Central Banks, interest rate fears, geopolitical tension and new risk rating on speculative assets.
What next for Bitcoin?
Bitcoin has traveled this road too many times before. Cryptos are notoriously volatile and the rollercoaster ride has become an integral part of crypto trading.
Given the geo-political tension in the MIddle East and Russia-Ukraine, investors should expect the wild ride to remain for quite a while. Savvy investors with liver may take the position that Bitcoin has taken such a spectacular fall, that it doesn’t have much room for a further fall, and can only rise.
Despite its latest crash, the cryptocurrency has functioned as protection against soaring inflation for developing economies with limited access to financial markets. Nigerian investors also speculate in Bitcoin trading because of the prospects of a windfall.
Bitcoin in the last 24 hours has already jumped by almost 7% in the last 48 hours. The late uptick in crypto prices mirrored gains in the U.S. stock markets.
Is this the start of another record rise or is a bigger fall on the way? One thing is sure. The heartbreaking swings are not yet over. Faint-hearted investors can shut their eyes for now.
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