A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has compared the fall of cryptocurrency in recent weeks to the crisis in the Nigerian Stock Exchange (NSE).
The cryptocurrency market has been experiencing a torrid time since Tesla founder, Elon Musk, announced that the company would no longer accept Bitcoin as payment option. Musk’s comment in mid-May led to a sharp decline in the value of Bitcoin, the most popular cryptocurrency in the world.
It has since dropped from $50,000 to below $35,000. Bitcoin lost about $15,000 in asking price in three weeks and currently trades at $36,030.
The development had caused sentiment against Bitcoin to spread across. The CBN governor, Godwin Emefiele, had continued to blame the crash on fraudulent activities.
However, Moghalu likened the crash in Bitcoin to regular occurrence witnessed in the stock market. He said same outcome has been recorded in other financial assets as investment remains a risk.
He said: “Cryptocurrency is taking a beating in financial markets. This is the case for most financial assets such as company shares on stock exchanges. It’s always a risk, but in Nigeria it remains a hedge against inflation and naira devaluation for many. This dip may be time to buy.”
The stock market in Nigeria has been on a decline since the beginning of the month with over N900 billion wiped off the bourse, according to the month’s market analysis.