With a crash in the value of bitcoin last week, Nigerians are pulling back to cut down on their losses in the cryptocurrency market as their stake in the market declined dropping to N1.09 billion as against N1.51 billion which it was at the beginning of August this year.
The decline has been sustained comparing the value of Nigerians stake in bitcoin which was N1.733 billion as at July this year. Last week, $40 billion was wiped off the value of Bitcoin as traders rushed for a sell off to take advantage of a rise in value of the cryptocurrency.
Prior to Wednesday, throughout the month of August, Bitcoin showed its highest level of stability since June of 2017. Between August 8 and 26, the price of Bitcoin remained relatively stable in the $6,000 region, before initiating an overdue corrective rally above the $7,000 resistance level.
But, a rushed rally from the $7,000 mark to $7,400 within a four day period led sell pressure to build up, allowing bears in the cryptocurrency exchange market to take over, leading Bitcoin to fall by a large margin.
“Speculators have gone crazy and they are trying to squeeze as much blood out of this trade as they can. Bitcoin hasn’t changed what it was since last December, so what is the panic?” Aslam queried adding that it is difficult to pinpoint specific factors that have led the price of Bitcoin to drop substantially in recent months.
He also maintains that we are in the early stages of the bottoming process after having reached all-time highs in late December 2017 and early January 2018. According to the Stutland, it’s going to take a full year or more for the prices to bottom out and for people to become comfortable with this reality. Stutland also noted that there will be shake-ups, saying “Bitcoin, Ethereum, and some of the leaders will stay. A lot of the altcoins out there will go.”
Although regulator in the Nigerian financial system had warned against Nigerians putting their funds in the cryptocurrency market, Nigerians have remained adamant and have continued to venture into the market that has since gained traction worldwide.
While some had linked the crash in the cryptocurrency market to the delay in the launch of the Bitcoin trading desk operation by Goldman Sachs, the bank said it has not closed its operation but merely delayed it to focus on a more urgent initiative that is cryptocurrency custodianship.