Cryptocurrency trading is legal in Nigeria, but the Nigerian Securities and Exchange Commission (SEC) has cautioned citizens about the fraudulent activities surrounding it. The Central Bank of Nigeria has announced plans to implement blockchain technology into its financial system and government insurance schemes. However, while some struggle to navigate the ecosystem safely, others find themselves falling victim to an online scam. At Remitano, we believe that education and choosing secure, audited platforms are the most effective ways to avoid a scam and trade profitably.
But why is crypto trading in Nigeria facing severe criticism in the midst of a thriving economy? Nigeria is without doubt one of the most blessed nations in the world in terms of natural resources. It has the highest population and the largest economy on the African continent, with over $500 billion of GDP.
Despite the abundance of natural resources, Nigeria has a poor Human Development Index ranking. This country has a wide range of socio-economic challenges, including inadequate education and a high crime rate. The quest for wealth and financial freedom has driven Nigerian youth to turn to cryptocurrency trading as a form of investment.
Google Trends data reveals that Nigerians have made more Bitcoin searches than any country in the last 12 months. Despite the high level of curiosity in cryptocurrency among Nigerians, real adoption of blockchain and cryptocurrencies in large volumes is yet to be seen.
Bitcoin as a substitute for the Dollar
Nigerians are gifted and talented freelancers who are breaking ground home and abroad. A common problem for Nigerian freelancers is how to receive payments from foreign clients. Nigerians that are aware of cryptocurrencies see them as a legit substitute for US dollars.
Payment remittance services like PayPal and Stripe don't allow Nigerians to receive money from their clients abroad. The reason is partly due to the unending fraudulent activities perpetrated by scammers trying to run a payment scam.
According to the National Bureau of Statistics, Nigeria's unemployment rate increased by 23% in 2018. This led many Nigerian youths to begin freelancing on platforms like Upwork and Fiverr to offer a variety of services.
Since these services are provided for clients outside Nigeria, receiving payment for the service offered can be an issue. Fortunately, with a BTC wallet and exchanges like Remitano, freelancers can receive their payment in BTC and exchange it for Naira with ease.
Cryptocurrency in Nigeria is Still Underutilized
While Nigerians are actively involved in cryptocurrency trading, and they accept bitcoin as a means of international payment, the technology itself is still underused. Nigerians are okay with making money from trading cryptocurrencies without exploring other opportunities that surround blockchain technology.
Research from Bitnodes, which tracks the distribution of BTC nodes around the world, shows that there are virtually no bitcoin nodes in Nigeria. We already know that Nigeria (Lagos) ranks 1st in online BTC searches. But very few people run Bitcoin Nodes, which comes as no surprise considering the poor state of electricity in the nation.
Another strong pointer to Bitcoin underuse in Nigeria is the fact that there are only a few retailers who accept cryptocurrencies. According to Coinmap, there are only six retail businesses in Nigeria accepting cryptocurrency (at the time of writing).
The reality remains that cryptocurrency trading is seen as a means to make quick bucks. We see people trading huge volumes of Bitcoin on platforms like Remitano daily. But it is hard to find a business that accepts cryptocurrencies as a means of payment.
On the positive side, interest in crypto among Nigerians is good for the future adoption of Blockchain Technology. It shows that people can fully embrace useful technologies and financial products powered by Bitcoin and cryptocurrencies.
Cryptocurrency Trading in Nigeria: How Much Do Nigerians Know?
The awareness of cryptocurrency trading in Nigeria is limited to millennials and people between 18 to 40 years old. Bitcoin is the most used and recognized cryptocurrency in Nigeria, followed by Ethereum.
ERC20 tokens and other stable coins are not widely accepted because many exchanges that list altcoins don't accept the Nigerian Naira as a means of exchange. People know about bitcoin and Ethereum, and they know they can make quick cash trading. Most Nigerians are not interested in saving bitcoin because there's virtually nowhere to spend it.
The awareness of crypto increased after the MMM scandal that affected many Nigerians in 2016. Since then, Nigerians have become interested in Bitcoin and cryptocurrency trading. They have begun to see cryptocurrency as their ticket to financial freedom.
Majority of Nigerians involved in cryptocurrency only trade Bitcoin and Ethereum as a side hustle to make extra income.
But without major exchanges to carry out these trades, it begs the question: "How are Nigerians trading cryptocurrencies?"
How To Trade Cryptocurrency on Peer-to-Peer
WhatsApp and Telegram groups remain the easiest and most common ways to buy and sell Bitcoin and Ethereum in Nigeria. Large volume traders invite their friends and regular buyers to the group while the admin serves as an escrow.
The groups usually have about 100-200 members, with BTC and ETH being the most traded cryptocurrencies. Cryptocurrency trading in these groups is quite risky due to scammers looking to deploy an asset-draining scam. However, such scams only occur in groups with no admin or escrow. There are also some P2P paid groups. These groups are the safest for local trades as they have a limited number of members, and their identity is known. Therefore, they are mostly scam-free groups.
Nigerians have to be careful when trading on Peer-to-Peer groups on these platforms. You should ensure that the group runs an escrow service and verify the admin's identity to avoid being scammed. Ultimately, it is safer to join a paid group.
Peer-to-Peer Crypto Exchanges as a Safer Choice
Apart from the P2P groups on social media and messaging apps, peer-to-peer exchanges like Remitano are the go-to platforms for cryptocurrency trading in Nigeria.
Trading on Remitano is a much easier and safer way to buy and sell crypto because of their ease of use interface and escrow system. Users can create ads to sell a specific amount of coins. The coin is then locked in the escrow until a buyer purchases the currency through a bank transfer. Once the seller acknowledges the payment, the cryptocurrency is released to the buyer's wallet, keeping both parties isolated from a standard P2P scam.
Here are other benefits of trading on Remitano.
Conclusion--Should You Trade Crypto in Nigeria (Is Crypto Trading Profitable)?
Things are much better than they were a few years ago, but the changes are still going on. Even with things on the upswing, it's always best to use caution if you're thinking of taking the plunge. Although the Securities Commission is implementing blockchain solutions to make cryptocurrency trading in Nigeria safer, there are still illegal exchanges that may have a negative impact if you invest with them. With a few security tricks up your sleeve to prevent a scam, cryptocurrency trading is certainly a lucrative investment.
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