As we go on, we will be looking at how enthusiastic Nigerians go about crypto trading and investing and answering the question “which one is better”?
Bitcoin in Nigeria
One significant beauty about the two activities is that they can both be engaged in on the short, medium or the long-term. Due to this added leverage and a community backed assurance of future price increase, a lot of young and tech savvy Nigerians have found a means of making a good amount of income by having a side hustle investing and trading in crypto.
By the statistical amount of Nigerians on the crypto scene, it is evident that they are profiting from it. But despite the efforts put in by her citizens to create a better life, the Nigerian government had to ban crypto trading and investing thereby limiting their chances even more. Thanks to exchanges like Remitano, the persistent lot have turned towards Peer-to-Peer (P2P) exchanges to seamlessly engage in their crypto activities amid the crypto ban.
Bitcoin Investing
Method of Bitcoin Investing in Nigeria is different depending on the individual doing the investing. While some people would prefer to hold their asset for the long-term in cold storage, some others prefer to hold on exchanges, preferably P2P, where they can either do medium or short-term. The latter type of investor can either sell off at high levels (to buy back on the dip) or exchange their Bitcoin for some other crypto on the platform. By doing so, they can diversify their crypto portfolio to encompass a wide array of altcoins that have good potential. This method casts a wider net for more profit, but how do you know which coins to invest in?
Knowing what coin to invest in is 99% due diligence and 1% luck. It’s impossible to tell how well a coin will perform without giving a deep review. Even at that, it is still pretty difficult to tell with 100% accuracy if another coin won’t surface with an even better solution to the same blockchain need. This is where the lady luck comes in, although most investors would prefer to stick with the original asset so early adopters are always at an advantage.
Wondering how to invest in Bitcoin in Nigeria? Owing to the recent government issued ban on crypto, the way to buy or sell Bitcoin in the country is limited to only P2P exchanges since the banks can’t restrict direct bank transfers between individuals.
Generally, exchanges are platforms where Bitcoin and other Crypto is sold to investors either by the use of Bank Deposits, Cards or from person to person (Peer-to-Peer).
On P2P exchanges, the buyer/seller gets to set their own price range and rate and so it is possible to get very low rates and buy very low amounts in contrast to exchanges that use only credit/debit card purchases. Looks like the situation of a blessing in disguise.
Since the 2017 bull run that attracted mass attention to Bitcoin, a lot of Nigerians have been able to jump on the Crypto wave and they have a lot to show for it by simply buying and selling on exchanges like Remitano.
Step 1 - Get a wallet address.
Whether you are buying as a long or short term investor, the first step is to sign up with a crypto wallet app if you can’t access a hardware wallet. There is a wide variety of software and hardware wallets that are very reliable for having your Bitcoin in cold storage for however long you want to. Some trusted wallets include;
Software Wallets;
Hardware Wallets;
- Trezor
- Trezor Nano S
- KeepKey Some investors prefer to store their crypto on the default wallet obtained from the exchange platform in order to escape transfer fees when they want to sell. Exchanges like Remitano automatically give new users a trusted wallet address as soon as they sign up.
Step 2 - Buy your Bitcoin.
After you have your wallet address you can easily locate a local Bitcoin vendor to buy crypto physically or sign-up on a P2P exchange where you can purchase it instantly from online verified users. With the KYC authentication in place, users can be rest assured that they are trading with verified users and their transaction is protected. Some exchanges where you can buy Bitcoin in Nigeria include;
[Remitano])(https://remitano.com/)
Binance
LocalBitcoin
Roqqu
These exchanges are some of the only P2P exchanges that offer services to Nigerians due to the current situation of the nation.
Step 3 - HODL.
After buying, the next best option is to hold your crypto in your wallet until you’re satisfied with profit levels, enough to sell. The duration of holding (Short, Medium, Long) on is up to the individual. Although, the most profitable since inception till date is the Long-term holding.
Checking by current price levels, if a long-term investor had bought N20,000 worth of BTC back in 2011, it would be worth over N3 billion, disregarding the constant depreciation of the NGN against the USD.
Isn't that Something!
The potential that BTC investments have is far beyond what we have seen so far, the main reason being that the underlying Blockchain Technology still has a lot to offer and we seem to only have scratched the surface.
Some people may be thinking “Oh, Since the coin has risen so much in the past few years, the best periods to buy have been spent”. Although this may be true, it is not still too late. Long-term research analysts have projected the price of 1 BTC to rise way above $500,000 in future and to support these numbers, we have seen renowned CEOs like Elon Musk (Tesla) and Michael Saylor (MicroStrategy) publicly confirm their neck-deep involvement in Bitcoin, as well as other altcoins.
People that feel skeptical about joining the BTC bandwagon because they feel it’s “too late” can also invest in other low price altcoins that have a better chance of getting to the recent BTC heights and beyond. Most of these altcoins are currently worth meager cents and could be worth thousands of dollars in a few years or even months, take Yearn.Finance for example.
However, it is always important to really consider the futuristic value of any crypto you would like to invest in by first of all reading the white paper and documentation. It is very unwise to only buy up altcoins on face value or even mass community backing alone. If an altcoin doesn’t serve a real purpose then it will die off naturally.
Also there are other pocket friendly options to look at including Bitcoin trading (as CFD) which we will be looking at shortly, [Remitano’s Learn and Earn, Trading on P2P exchanges, Freelancing for Crypto, etc.
Advantages of Bitcoin Investing in Nigeria
- Exchange freedom and fluidity since Central Banks exert no control over it.
- Holding Bitcoin is a very good hedge against inflation and the Naira’s devaluation.
- Information and accountability is a lot more transparent as the Blockchain ledger is public for all to see.
- For Nigerians, investing in crypto has given the citizens more control over their finances since the banks answer to the Federal Government.
Disadvantages of Bitcoin Investing in Nigeria
- Although the risk involved in Crypto trading is usually a better bet against the Naira, the risk is still far from zero.
- Up until recently, the fees for BTC transactions were very minute compared to average bank charges for the same amount. However, altcoin users still enjoy very low fees.
Bitcoin Trading in Nigeria
Bitcoin trading is another crypto-related activity that has been gaining traction in Nigeria just like other parts of the world. Trading Bitcoin can be done in two ways; one is by trading it as CFD on MT5 (MetaTrader 5), and the other method is by buying and selling at profitable prices on P2P exchanges like Remitano. While traders stand to gain on both fronts, the strategies and profit levels differ.
Bitcoin traders that use CFD (Contract For Differences) have more leverage on the MetaTrader platforms as they can bet on the price movement without actually owning any BTC or having to stake their holdings. Owing to this advantage, CFD traders stand to gain more but are also at the risk of losing as much, twice as fast no matter how skilled.
This type traders have to stay up to date on everything Bitcoin and crypto related to be able to trade successfully. The movement of the Forex market is normally affected by news updates on real world happenings and the Bitcoin market is not very different either. Although it is deemed a “highly volatile and speculative asset”, the Bitcoin market is still very much affected by the level of adoption and trading activities going on against BTC on any pair. Any trader must have a good strategy and learn how to read the resulting indicators and signals very well, if not they will only end up losing it all.
Traders that simply buy and sell from their exchange hot wallets are at less risk of running into such loss. Exchange traders buy and sell at their own pace and exchange rates so they can actually turn the tides in their favour most of the time. These traders also have to keep up with the global crypto news in order to anticipate possible price movements, but unlike MT5 traders they generally have no business learning how to read market charts and indicators. They also get to trade with their real assets, so the risk impact is a lot more direct without any leverage option.
Since Cryptocurrency rose to fame, there have also been concerns about the rise in crypto scams in Nigeria, as well as globally. This has resulted in a lot of distrust among newcomers who got burned quickly. It is very common for these scammers to pose as crypto traders with promises of making as much as 100% profit in a few days or even hours. Assurance of such astronomical figures is the first red flag that victims fail to take note of.
How does one go about trading Bitcoin in Nigeria? Since the crypto ban in the country, it seems like the platforms offering this service have become limited. While it is true that a few exchanges couldn’t be used anymore, there are still a handful of platforms that Nigerians turn to.
Step 1 - Open a Trading Account
Whether you want to trade on a crypto exchange or an MT5 platform, the first step would be to open an account and verify your identity through the correct method. At this point the account is active and ready to be used. However, if you want to start trading on MT5, your very first step would be to know your candlesticks and indicators.
Step 2 - Deposit Funds
The next step would be to fund your trading account through the prefered method. Selling on an exchange would require that your deposit be made in BTC. Forex platforms usually accept a wider range of deposit methods including BTC deposits.
Step 3 - Start Trading
At this point you can start trading on the platform and making your profit. Trading on an exchange platform, you might want to set an attractive rate especially on a new account but always keep the profit making in mind. Having positive reviews will go a long way in attracting more customers and so your customer experience has to be at your best.
Advantages of Trading Bitcoin in Nigeria
- A lot of profit is there for the taking, so long as you know how to
- Rather than cold storage that is totally at the mercy of the market bulls, crypto can be traded even on a downtrend to make profit.
- Crypto traders can pull out of positions instantly and at will. Investors may be willing to do so, but most times the process is not as fast.
- CFD traders don’t have to lose their real Bitcoin while trading on MT5.
- Exchange traders can set their custom rates and profit at their pace.
Disadvantages of Trading Bitcoin in Nigeria
- Trading Bitcoin as CFD can be time demanding, especially when you have to read the signals yourself.
- While trading on exchanges, the trader may be forced to set prices close to that of other traders despite what they want.
- To start trading crypto comfortably, you’ll need to start with a decent amount.
Bitcoin Investing vs Bitcoin Trading; Which is a better crypto activity?
In a country like Nigeria with strict crypto laws, there are enough challenges already for any crypto related activities the inhabitants want to engage in. For crypto investors in the country, they only have to buy and hold for a duration of time.
For short and Medium term investors they may have to watch the news as regularly as traders do, to stay ahead. Long term usually don’t have much business reading the news and predictions, unless when looking for new crypto to buy. This activity doesn’t require a fortune to begin with, but most vendors have a minimum amount.
Crypto traders will have to be a lot more attentive and up-to-date on crypto news so as not to get left out. Some level of time and resources are expended daily when trading. Not as much as having a 8-to-6 job but not at all negligible either. The fun of it all is that all of your spent time and resources are gotten back in full as profit not as a fixed wage. Capital for trading crypto can start as low as $50.
Conclusion
Having looked at both activities, it’s clear that the potential risk and profit levels differ greatly. The greater the risk, the greater the reward but so is the work you have to do to guarantee that you win. Both activities still have a massive number of Nigerians engaged and trooping in daily, this goes to say that there is indeed profit to be made on both ends. The best option should be the one that you’re more skilled at, and anyone can learn them both. If not trading and investing, there are a few more profitable activities that Nigerian crypto enthusiasts can partake in.
