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According to an analysis of Google searches by Leverage Trading, Nigeria is the “second country in the world for searches related to crypto leverage”. Along with South Africa and Ghana, the West African nation also dominates searches for the term “crypto trading”. Regulators and consumer protection agencies must “provide greater safeguards against predatory practices,” according to a spokesperson for Leverage Trading.
Leveraged trading and the risks
Nigeria has had the second highest score (94) globally for searches related to crypto leverage over the past five years, the latest Google search analysis conducted by Leverage Trading showed. According to the analysis, Singapore (100) is the only country that outperformed the West African nation on searches “with a focus on transactional searches such as ‘how to leverage commercial crypto’.”
On the other hand, the analysis shows that Nigeria, along with South Africa and Ghana, dominate Google searches for the term “crypto trading”. Compared to similar searches by US residents, Leverage Trading found that Nigerian searches were four times higher.
According to Investopedia, leveraged trading is “the use of borrowed funds to increase one’s trading position beyond what would be available from one’s cash balance alone.” Although this form of trading can potentially magnify a trader’s profits, it can also magnify losses, so it is not recommended for inexperienced people.
Regulators must ‘provide greater safeguards’
However, despite this, African traders do not seem to be troubled by the risks associated with leveraged trading. Commenting on the findings which show that Africa holds a disproportionate share of total global searches for leveraged investment products, a spokesperson for Leverage Trading said:
As technology advances, it is becoming easier and easier for individuals in emerging markets to access high-risk financial products like leveraged trading. While these products may offer the promise of wealth creation, the reality is that they can also lead to devastating losses that perpetuate the cycle of poverty. The risks associated with high leverage and potential losses cannot be overstated, and it is crucial that individuals fully understand these risks before engaging in leveraged trading.
The unnamed spokesperson added that with financial companies increasingly targeting individuals in poorer countries, regulators and consumer protection agencies must “provide greater safeguards against predatory practices”.
Meanwhile, from analysis of research of different forms of leveraged trading, Leverage Trading has found that while Africa is dominant in many researches related to leveraged trading, the continent is at the lags when it comes to searches for the term “stock market leverage”. According to the analysis, this category is dominated by Singapore, Hong Kong and the United Arab Emirates.
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Terence Zimwara
Image credits: Shutterstock, Pixabay, Wiki Commons
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