As a Nigerian, it is quite possible that your life will be affected by one of these two assets – Crude Oil and Bitcoin – hence the thought-provoking question.

From a national perspective, the Nigerian economy is heavily influenced by oil prices, which is a determinant of the oil revenues that fund the country you live in.

And from a retail perspective, your investment portfolio is exposed to the cryptocurrency that is influenced by Bitcoin – digital gold that has an asymmetric impact on altcoins both short and long term. .

One of the ironies you would observe over the past few months on Nigerian social media (which would be secondary data in this speech) is that Nigerians are more excited about Bitcoin price hikes than oil price hikes.

A particular assumption for this event is that Nigerians had to fend for themselves as there appears to be a mismatch between Nigeria’s oil revenues and the standard of living of its citizens – although at a macro level this claim can be debated. .

The paradox of this observation is that despite the Nigerian government’s crackdown on cryptocurrencies, a good number of Nigerians still rely on Satoshi Nakamoto’s innovation as an investment vehicle to increase their wealth.

Retail investors in Nigeria have switched from treasury bills to dollar savings to cryptocurrency investments as they seek alpha on inflation.

$ 400 million worth of BTC has been traded in the last 365 days on LocalBitcoins and Paxful (peer-to-peer platforms), 11 million Nigerians have Binance accounts and a new cryptocurrency exchange, Bybit is entering the Nigerian market offering thousands of dollars in bonuses for new customers as the cryptocurrency’s massive adoption spreads across the West African nation.

Last week, Clem Agba, the Nigerian Minister of State for Budget and National Planning, called for more relaxed cryptocurrency regulations that will give citizens and government a chance to maximize opportunities in the cryptocurrency. digital asset.

“A significant percentage of Nigerians are not particularly knowledgeable or interested in monitoring contracts for Brent crude, the world’s leading benchmark of crude oil that generates significant revenue for Africa’s largest economy, but the interaction with a significant number of young Nigerians and data gathered from Google trends shows they are more concerned about crypto-asset surveillance, ”sAid Olumide Adesina, socio-economic analyst at Quantum Economics, when asked which of these asset prices Nigerians are watching.

However, oil has been Nigeria’s support system since its discovery in Oloibiri, Bayelsa State.

Today, $ 100 worth of oil is Nigeria’s most prized commodity mecca. The last time oil hit this price was in 2014. According to the CBN Statistical Bulletin, the federal government raked in 6.79 trillion naira that year from oil revenues.

Oil revenues contribute to debt service, foreign exchange liquidity and the payment of civil servants’ salaries. The country is very sensitive to oil prices, and unions and teachers’ unions monitor oil prices so they know when to demand an increase in wages.

So, without having special interests or a personal agenda, how many Nigerians care about the price of oil today?

It would have to go back to April 2020, when prices hit negative numbers and the Central Bank entered full foreign exchange management mode where Nigerians prayed for higher oil prices.

Additionally, I spoke to Chimauche Njoku (Tech Lead) and Emmanuel Dan-Awoh (SEO Specialist) at Nairametrics, a leading Nigerian financial media outlet, about the stories that drive the most traffic between oil and cryptocurrency. “Cryptocurrency” was the unanimous response. To contextualize this, we compared the number of views on two separate articles written during the same time period.

• “Oil prices rise as concerns over Omicron Covid-19 variant ease” – 662 page views
• “Red Saturday: 375,113 investors lose $ 2.33 billion in cryptocurrencies, bitcoin drops to $ 44,000” – 2771 pages viewed.

However, demographics could mar the cryptocurrency’s damning narrative. Regarding age – the majority of Gen Z (9-24 years old) and Millennials (25-40 years old) who introduced “technology as the new oil” would choose $ 100,000 Bitcoin while the majority of Gen Xers (41-56) and Baby Boomers (57-66) would lean for $ 100 worth of oil, as concepts like decentralization, distributed ledgers, and extravagant gas / grid charges can confuse them .

If we go deeper and get out of the social media bubble and look at all layers of class, we might start to see the big picture in favor of $ 100 oil for $ 100,000 Bitcoin, because most Nigerians depend on it. government for a living. better and provide them with infrastructure. But with the government’s plan to remove subsidies, market determination will push crude oil prices up, leading to higher fuel prices at national gas stations. This development could weigh on Nigerians who do not opt ​​for $ 100 of oil.

So when did Bitcoin enter the Nigerian conversation?

The truth is, most Nigerians have turned to Bitcoin. FOMO, which means “fear of missing out,” explains how investors jump on assets during rally periods so they don’t miss out on asset gains. Nigerians’ exposure to Bitcoin may have spiked in late 2020 / early 2021 as speculative asset saw a meteoric rise from $ 10,000 to $ 69,000 – although along the way there has been a 50% correction, where phrases like “buy the dip” showed the determination of investors to profit from the rise in Bitcoin.

Now who will get there first – $ 100,000 Bitcoin or $ 100 Oil?

First, what influences the price of Bitcoin? Scarcity, widespread adoption, regulation and mining cycles. At the start of Q4 2021, a majority of the market expected Bitcoin to hit $ 100,000 before the end of 2021. However, we may have seen the all-time high yet, and the current correction sent back bearish feelings. Fundamentals such as the strengthening dollar, inflation, and the attractiveness of relatively less risky assets like stocks dampened Bitcoin’s $ 100,000 outlook.

Oil, on the other hand, which is influenced by supply, demand and financial market coverage, continues to decline relative to the $ 80 region as fundamentals such as geopolitics, coronavirus and travel restrictions. have proven to be a stumbling block for $ 100 oil. Joe Biden’s recent intervention (SPR version) in the market will ensure that he doesn’t get there for some time.

But in 2022, there is a possibility that oil or Bitcoin will hit $ 100 or $ 100,000 respectively – a commodities supercycle may push oil to these levels and preparations for Bitcoin’s next halving could increase demand. of the flagship crypto asset. From a trade / investment perspective, both assets can be traded on financial exchanges, but a smaller number of Nigerians are trading oil compared to Bitcoin.

So digital gold or black gold, which is your choice?

Caveat: The content is for informational purposes only, you should not interpret such information or other documents as legal, tax, investment, financial or other advice. Nothing on this site constitutes a solicitation, recommendation, approval or offer by the author or any third party service provider to buy or sell any securities or other financial instruments in that jurisdiction or in any other jurisdiction in which such solicitation or offer would be illegal under the securities laws of that jurisdiction.

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