Here's what Nigeria's naira float means for its crypto market

cointelegraph.com:

Nigeria, known for its growing adoption of cryptocurrencies, particularly Bitcoin (BTC), on June 14, floated the nation’s naira currency to allow banks and other forex market actors to trade the currency freely. This new policy can have several implications for crypto traders. 

Foreign currency buyers and sellers can trade at rates they feel comfortable with based on market conditions, instead of what the Central Bank of Nigeria (CBN) forces them to sell. This move follows the President's decision to implement a 10% crypto tax on capital gains and could easily be the biggest game-changer for Nigeria's crypto industry, positively or negatively. 

Cointelegraph spoke with a local crypto expert, David Osawaru, who said that fluctuations in the value of the naira against other currencies, including cryptocurrencies, may impact the profitability of crypto trades. A rapid drop in the value of the naira would have a negative impact on crypto traders. On the other hand, it would mean high profitability if the value of the naira spikes.

Press Release: Operational Changes to the Foreign Exchange Market ...https://t.co/80AqEHqJub pic.twitter.com/ClbVJducnN

According to Osawaru, in the case of rapid naira devaluation, there’s the possibility of crypto traders experiencing higher transaction costs due to potential changes in exchange rates. Increased volatility could result in wider bid-ask spreads, making it more expensive to buy or sell cryptocurrencies using the naira.

Cryptocurrencies are typically traded on exchanges and these exchanges rely on the liquidity of different fiat currencies, including the naira, to facilitate smooth trading. If the liquidity of the naira decreases, it becomes more challenging to match buyers and sellers