The Nigerian cryptocurrency market has grown tremendously since the inception of the first cryptocurrency, Bitcoin, to become the largest Bitcoin market in Africa and the second-largest market globally, after the USA.
However, the Nigerian government is making things difficult for crypto investors because of the new laws restricting the trade of cryptocurrencies.
Let’s look at how to buy Bitcoin in Nigeria in the midst of a derailing economy and ban notices.
Summary - Best Sites to Buy Bitcoin in Nigeria Instantly
As of February 2021, the trade of cryptocurrencies is banned in Nigeria. The Central Bank of Nigeria issued directives to all financial institutions like banks to cease any operations dealing with cryptocurrencies. Any crypto dealings and transactions through the banks are prohibited.
The CBN (or Central Bank of Nigeria), in a press release, elaborated their reasons for this ban, claiming it is for the safety of the Nigerian investors. The unregulated nature of cryptocurrencies is a major concern as CBN says that it goes against the laws set for legal tenders.
Another concern is the anonymous nature of Bitcoin’s transactions, making it a favorable ground for money launderers and terrorists.
The economy’s stability is threatened by the extreme volatility associated with Bitcoin. So, the CBN’s decision to ban the trade of cryptocurrencies is to keep the country’s economy stable.
Bitcoin & Crypto Trading in Nigeria
For understandable reasons, the CBN has limited the trade of cryptocurrencies in Nigeria. This action has made it very difficult for investors to trade their crypto seamlessly.
It’s now more difficult for new investors to get into cryptocurrency trading as most crypto exchanges allow deposits through debit cards. However, since the ban, crypto enthusiasts are finding new ways to transact their Bitcoin without breaching it.
Regulation of Bitcoin Trading in Nigeria
The Securities & Exchange Commission (SEC) is the regulatory body in Nigeria. The CBN ban on the trade of cryptocurrencies came as a reminder to them of the need to regulate the use of cryptocurrencies within the country.
After the ban on 5th February 2021, the SEC came out on 12th February 2021 to announce their plans to regulate cryptocurrencies. However, these plans are currently on hold as they demand the re-opening of bank accounts belonging to crypto investors, closed following the CBN’s directive.
This matter has since escalated to higher government authorities as parliament look to engage both SEC and CBN in a bid to find the way forward. The crypto investors look forward to a better future for the crypto market as these two entities work together.
The future of cryptocurrency regulations in Nigeria depends largely on the fruits of the discussions underway. We hope that the teams involved will resolve the matter as soon as possible.
Best Sites to Buy Bitcoin & Crypto in Nigeria
With the recent ban on the trade of cryptocurrencies in Nigeria, crypto investors are now focusing on crypto exchanges that offer peer-to-peer transactions and those that accept a wide range of payment methods other than bank transfers and cards.
This review discusses two of the best sites to buy your cryptocurrencies and store them securely. These two are eToro and Paxful. However, when writing this article (March 2021), eToro had stopped offering services to Nigerian clients. We’ll update this article in case this changes in the future.
How to Buy Bitcoin through eToro
eToro, an Israeli-based crypto trading platform, did not have a physical location in Nigeria. They offered services remotely to Nigerian investors. Over the years, millions of Nigerians had signed up to eToro and had become a profitable place for them.
Nigerian clients preferred eToro over other crypto exchanges because of the following reasons.
eToro accepts a wide range of deposit methods like Skrill, Neteller, and PayPal.
It can be easily accessed in Nigeria, as the sign-up process is easy and straightforward.
eToro offers several cryptocurrencies that you can trade, not just Bitcoin.
eToro charges no trading fees making it an affordable option for most traders.
It’s a safe and preferred place to invest your money, considering Top-tier regulators regulate it.
To start trading on eToro, you’ll need first to create an account and make a deposit. The minimum deposit is 90,000 Naira (approximately $200). You’ll receive a secured Bitcoin wallet where you can store all the cryptocurrencies you buy. It is probably the best Bitcoin wallet in Nigeria today.
If eToro restores its services to Nigeria in the future, you can easily create an account and start your cryptocurrency investment journey. For now, try other platforms like Paxful, which we have discussed below.
How to Buy Bitcoin through Paxful
Paxful offers peer-to-peer trading services at no extra fee. Since the banning of crypto trading in Nigeria through banks, most Nigerian investors have resorted to Paxful as it allows money deposit through MTN Mobile Money.
Selling your Bitcoin on Paxful is easy. First, you’ll have to sign up and create an account and then log in to your account. Because the platform works on a peer-to-peer basis, you’ll be required to find a buyer and negotiate so that you can both get the best deals.
Here’s how to do it.
Indicate your requirements – The requirements here are your payment method, Bitcoin amount, location, and the currency you prefer. This information should help you identify prospective buyers when you search for offers.
Review offers – When you search for offers, you’ll get a list of hundreds of buyers fitting into your requirements, and so it’s time to choose. Carefully examine each of the offers to see if it fits your requirements well. Once you find the right one, click on “sell” to view the buyer’s conditions.
Start the trade – if the buyer’s terms are good for you, you can click on the “Sell Now” icon to open a live chat and start the trade. Your Bitcoin is transferred on escrow, where it’s held until the buyer completes the trade. Once the trade is complete, you get your payment, and the Bitcoin is released to the buyer.
Feedback – How was your experience with the buyer? At this point, you are free to leave feedback that future clients can refer to before trading with them.
Easy peasy! If you’ve been hesitating to use Paxful to buy or sell your Crypto, you can try it now. The good news is, you can trade right from your MTN line without bank interventions so that you won’t breach the law.
As of today (March 2021), the price of Bitcoin is as follows:
1 Bitcoin = 22,209,904.10 Nigerian Naira.
The price is always fluctuating depending on the present market conditions. Please check for the updated price.
Cryptocurrency Scams in Nigeria
Many Bitcoin scams have been initiated in Nigeria, thanks to Bitcoin’s popularity in the region. The rise of these scams has led the Nigerian government to ban cryptocurrency trading in Nigeria.
The most common Bitcoin scam has been conducted through social media, mostly Instagram. The scammers create US-customized profiles displaying the lavish life they are living from their Bitcoin profits. The purpose is to lure new crypto investors who are excited about the riches without thinking too much.
The scammers engage the newcomers in enticing conversations and then convince them to send them their Bitcoin as an investment, with the promise of high returns. Once they send the Bitcoin, the scammers bail out and run away with the money. Many people are falling for it, even today.
Another common scam involves the rise in the number of Bitcoin exchanges in the country. Most of the new exchanges are fake and not registered by the financial regulators. To attract investors to the site, they offer crazy deals and bonuses.
It’s easy to identify malicious Bitcoin exchanges because of their deals, which are too good. However, many people do not pay attention to the red flags and go-ahead to invest their money. After a short while, the site closes and disappears with all the money from the investors.
The best way to avoid scams is always to be alert and keep abreast with all the information related to any exchange or anyone claiming to be an agent. Confirm their registration status and check people’s reviews to know their experience on the site.
Bitcoin Mining in Nigeria
Mining Bitcoin in Nigeria is hard, just like anywhere else in Nigeria. This is because of the huge investment you’ll have to make before you can manage to mine one Bitcoin. The mining is becoming harder as it’s about the get to the threshold set by Santoshi.
Most people in Nigeria have created mining farms where they can get enough electricity to power their ASIC machines used in mining Bitcoin. With the high cost of power and the derailing Nigerian economy, many investors are pulling out from the Bitcoin mining business and focusing on other alternatives.
One of these alternatives is to mine other coins like Ethereum that can be mined using a normal PC and a GPU which consume far less electricity than the ASIC. After that, they convert the mined coins to Bitcoin at the current market price. In this way, many investors are making so much more than they would directly mine Bitcoin.
Bitcoin Popularity in Nigeria
As mentioned earlier, Nigeria’s Bitcoin market is large, and more people are joining the bandwagon to become Bitcoin owners. The rise in Bitcoin’s popularity among Nigerians is an indication that most prefer using Bitcoin other than their local currency.
In October 2020, the country experience chaotic protests, and the government barred people from accessing their money through local banks. In this scenario, many people turned to Bitcoin to complete their transactions.
Even as the government has currently banned cryptocurrencies, many investors are not relenting as they are coming up with new ways to trade their Bitcoin. According to Paxful – a peer-to-peer trading platform – there are over 1.3 million registered Nigerian accounts, making Nigeria rank at number two, second to the USA.
The depreciating Naira value pushes more people to consider investing in Bitcoin as it is seen as a safer and more reliable option. The unregulated nature of Bitcoin gives investors more freedom on how they spend their money.
Also, with cryptocurrencies, investors earn more passive income from their savings at higher interest rates than the banks.
Where Can I Use Bitcoin in Nigeria?
Following the Nigerian government’s crackdown on Bitcoin, it isn’t easy to use Bitcoin in stores and retailer shops. However, Bitcoin ATMs convert BTC to Naira, and then you can use the money anywhere you want. But, this solution is not available everywhere.
The other alternative is to use the BTC to buy gift cards that are acceptable in stores across the country. Coincola, based in Hong Kong, launched its services in Nigeria in 2019, where you can exchange your cryptocurrency for a gift card and use it in acceptable stores.
You can also use crypto debit cards to shop in online stores at your convenience. There are three available types of crypto debit cards. Examples of these cards are:
First Kudi, which you can use to make payments on POS terminals.
Patricia Bitcoin ATM Card allows you to withdraw from your BTC Wallet and make payments online and on POS terminals.
Cryperium allows you to pay merchants and withdraw cash in Naira on ATMs.
With the promise of more Bitcoin ATMs across the country, BTC users look forward to brighter days even as the Naira’s value continues to drop.
Bitcoin ATMs in Nigeria
Nigeria is the 8th country in the world to have a Bitcoin ATM installed by BlockStale to serve Nigerian investors. The machine’s design allows it to convert Naira to BTC and BTC to Naira seamlessly.
Other than Bitcoin, the machine can convert other coins such as Ethereum (ETH), Bitcoin Cash (BCH), Lightning BTC (LBTC).
At the moment, there’s only one Bitcoin ATM in Nigeria, situated in Lagos at the Dazey Lounge and bar. However, Blockstale BTM promises to install 30 more ATMs across the country so as to meet the demands of the increasing number of investors in Nigeria.
Summary - Best Places to Buy Bitcoin in Nigeria Instantly
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