It’s no news that the crypto bear market, which is likened by many to a massacre, has caused a lot of instability in the space. Investments in the crypto space have slowed down, the number of participation is consistently declining and major industries such as the Decentralized Finance (DeFi) and Non-Fungible Token (NFT) ecosystems are seeing less and less participation on a daily basis.
Although the cryptocurrency market hasn’t had the best of years, those building in the space in Nigeria are facing problems on two fronts. While they are facing the fallout of the cryptocurrency market, they are also faced with harsh economic and regulatory climates that have really hampered the growth of the usage of cryptocurrencies in Nigeria.
While the CBN’s ban on banks regarding processing cryptocurrency-related transactions is still on, adding the current bear market situation, has caused a major reduction in the interest from speculative players in the cryptocurrency space. A report by the Boston Consulting Group (BCG), in partnership with Bitget reveals that in terms of the cryptocurrency market size in Africa, Nigeria has the second largest market, behind South Africa. Nigeria was once leading in terms of crypto market size and has seen its position taken as favourable regulations have aided other African countries to move ahead as they embrace this new technology.
The consistent fall of Nigeria’s native currency, the Naira, has made it even more expensive to participate in the space as P2P market operators. The only avenue to participate in the market, are trading $1 in stablecoins for over N700. As July inflation numbers hit its highest level since 2005, the country’s inflation now stands at 19.64%, one of the highest in the world.
As you can see, it is already tough, to run a business in the Nigerian economy today. Now, trying to run a cryptocurrency business in Nigeria with a ban from the apex bank and no clear regulations, the current bear market now seems like an episode of Tom Cruise’s hit movie series, “Mission Impossible.”
Nairametrics spoke to some key players and stakeholders in the crypto space to know how they are fairing with the current bear market. Here are some of the comments we gathered;
- James Ademuyiwa – Head of Blockchain & Co-founder, Scalex
James Ademuyiwa explained that there have been a few disappointments but has made a point to make the best use of the bear market. He explained, “As a business, we were met with a few disappointments at first because it was just at the brink of our first partnership with a major exchange’s community in Nigeria, and this community is one filled with traders. The bear market wave hit us from that angle, and we had to sit back and re-strategize.
“It would shock you to know that we did the unthinkable at the entrance of the bear market; earlier in May, Scalex raised some capital from Emurgo to continue building out the first Automated P2P market out of Africa. This good news then spurred us forward, as we are more confident that we haven’t built a product for just the trend or the now, but for the posterity of Blockchain in Africa.
“In addition to this, as a company, we know we are building for all seasons so, we used that opportunity to have multiple partnership and collaborative calls, which are going to be known to the public in a few weeks in the last quarter of 2022. Also, we used that opportunity to look into different areas of our users’ lifestyles like sports betting, to see how we can help them smoothly navigate through the storm and come out profitable.
“Conclusively, it is safe to say that we have been making the best use of the bear market season while we are also preparing for the next bull run. Yes, it can be really gloomy this season, but we have decided to focus on the silver lining.”
He further stated that his portfolio has equally taken a beating. He stated, “As a person, I am still trying to recover from my bleeding portfolio from the bear launch, but I’ve always been a HODLer so, I am not moved by the current market conditions. I would continue to HODL and increase my holdings of promising projects and tokens.”
- Rutherford Atayobo, CEO of Manilla Finance
Rutherford Atayobo explained that he was already prepared for the bear market as he took profits early and reinvested into other assets like real estate. He stated, “Many a times when people talk about the crypto bear market, it is spoken of in pungent terms and with great disdain. We are quick to forget that it is this same industry that took many people out of poverty in the last bull market and the bear market is more like an unavoidable reset in the market giving more investors the opportunity to venture into the space.
“While I can’t say we are happy the bear market was ignited by the LUNA protocol collapse, it’s important to note that we have been preparing for it with the sole aim of returning to the market since most assets was now up for sale at almost a 95% discount. What can be better than that? One of the many ways we prepared for the capitulation was taking decent profits as the market was pumping and then reinvesting the proceeds in other markets such as real estate and stocks. That way, after the capitulation, we are able to re-enter the market with proceeds from our hedge.
“So, I’d say we are coping just fine and hopefully, the Ethereum Merge may just create another momentous bull market before a long winter.”
- Adetayo Adesola, Growth Manager, Amber Group
Adetayo Adesola explained that Amber Group is operating from a position of strength despite the current bear market. He stated, “Amber Group remains committed to the overall growth of its business following a successful USD$200 million Temasek-led Series B+ round announced earlier this year. Valued at USD$3 billion, I think we operate from a position of strength amid volatilities in the global market.
“In recent weeks, the company has made significant moves to bolster business resilience and safeguard investors’ assets and trust in the company by insuring assets on behalf of our customers that aggregate to over $100million in coverage.
“This also goes in tandem with our inherent market neutral strategy allowing customers to garner gains in bullish or bearish markets for our earn products. In Nigeria, a lot of customers have been seeking a hedge against high inflation and currency devaluation and are attracted to our fixed returns on stablecoins backed by the US dollar which is the highest in the market.”
- Harrison Obiefule, PR & Marketing Manager, FTX Africa.
Harrison Obiefule explained that while a lot of things have been put on hold, FTX Africa’s growth strategy remains the same. He explained, “I’ll say not different from any other major player in the African crypto space. A lot of things are compressed at the moment for the obvious reasons, but our growth strategy and business objectives haven’t changed. We’re still pushing for adoption through education, actively building our community and team, and just generally laying a solid foundation that we can build and leverage on for when the bull cycle comes around.”
