By Claire Obae
- Major African crypto players including Quidax and Lazerpay have already laid off staff following the $32B FTX collapse
- Netstcoin had invested a huge chunk of its operating capital, $4M in FTX, and is now struggling to stay afloat
The Nigerian crypto sector is beginning to slouch against the current odds of the broader financial markets. If the recent $32 billion collapse of FTX Global is anything to go by, businesses across the continent should start preparing for the consequences of the cryptocurrency market tumble. Major African crypto players including Quidax and Lazerpay have already laid off staff, and it seems more are to follow.
Why This Matters: Investors pulling out is the main reason behind the layoffs but elsewhere, Netstcoin has a different story. The company had invested a huge chunk of its operating capital – $4 million in FTX and is now struggling to stay afloat. So why is this happening? Crypto markets are highly volatile and investors have become wary of putting their money into them.
Moreover, cryptocurrencies are still in their infancy stage in Africa and the lack of regulation around crypto has been a major hurdle to its adoption. It’s not just Nigeria that’s struggling with cryptocurrency regulation: there are no formal rules anywhere on the continent. The decentralized nature of blockchain technology makes it very difficult to implement regulation.
Nigeria is Africa’s largest economy, and its citizens have been involved in buying and selling cryptocurrencies for years. The country had seen a surge in interest in crypto over the past two years, but recent events have led to a freefall in the value of major stable coins like bitcoin and other digital currencies.
What’s Next: The crypto market has been on a rollercoaster ride and these massive fluctuations have left many investors in limbo. It’s important to note that the market isn’t dead, far from it. As governments around the world begin to regulate cryptocurrencies and their trading activities, more institutional investors will enter the space and provide liquidity to help stabilize prices.
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