You may need cash for everyday expenditures or you may just want to book profits with the intention of reinvesting them later – and in either case you will be interested in learning about the ways of converting your crypto stash to fiat. The US dollar (or its proxy USDT) is the obvious choice here, but sometimes you need an offramp for a local currency such as Naira.
With this task in mind, let’s explore the options available to Nigerian crypto users.
When you want to sell crypto for fiat and then withdraw the money to your bank account or debit/credit card, you need to find a service that facilitates these conversions and provides a crypto-to-fiat offramp, in our case for the Nigerian Naira (aka NGN):
The services that give you this option are:
payment & remittance systems
peer-to-peer (p2p) marketplaces
Two primary methods of converting cryptocurrencies into fiat are orderbook-based exchanges (for example, Binance) and p2p marketplaces (for example, Bitpapa). Major exchanges offer liquidity and have a huge choice of coins, while p2p marketplaces provide a secure trading environment.
If you need a tool for fast conversions with the least amount of effort applied, swap services and remittance systems that support such conversions will help you get that. In case you want to receive cash on hand, you would head over to a nearby Bitcoin ATM.
Basically, it works the same in Nigeria as anywhere else in the world, with the caveat being that this African country is not exactly a crypto-friendly territory. In 2021, local monetary authorities outlawed cryptocurrency transactions, so the choice is not that great when it comes to selling your Bitcoin for Naira (though things may change in the future).
Still, there are a few avenues through which you can get a fiat offramp in Nigeria, and next we are going to explore them in detail.
Bitcoin ATMs come in two varieties: the ones which only allow you to purchase Bitcoin as well as a few other coins (these are called unidirectional) and the ones with which you can also sell cryptocurrencies and make a cash withdrawal (bidirectional).
The process of buying Bitcoin via an ATM is relatively simple. You either enter your Bitcoin address manually or use a QR code that the machine reads off of your phone’s screen. Then you insert the money into the ATM and the machine sends the coins to your address. It is unlikely that something will go incurably wrong here so that you are left with nothing.
The process of cashing your Bitcoin, however, is open to an unnerving failure. To receive fiat, you need to send your coins to a specified address first, and you won’t be able to cash in until your transaction has been confirmed. Thus, you may end up with neither fiat nor crypto.
The good news is that there are two crypto ATMs in Nigeria (both located in Lagos) with which you can try your luck at selling your Bitcoin for cash.
PayPal is arguably the most widely known payment system across the board that offers cryptocurrency conversion operations. However, the Nigerian Naira is not on the list of fiat currencies supported by the platform, so you have to try your luck elsewhere.
And that place might be BitPesa, a remittance platform from Kenya.
This service allows you to transact in a number of African currencies (including Naira) by employing cryptocurrency for money transfers across supported countries. With BitPesa, you deposit Bitcoin into your account on the platform, exchange it for Naira and receive the money into your bank account or mobile wallet such as M-Pesa.
Swap services often go as exchanges, especially when they are standalone platforms and not part of a bigger service such as an orderbook based exchange or a p2p marketplace. They allow you to quickly exchange crypto into fiat by offering a simple interface with a minimum set of options.
The two swap services that are most popular in Nigeria are NairaEx and Yellow Card.
On NairaEx, you can sell 4 cryptocurrencies for Naira: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The service supports major payment methods available to the residents of Nigeria such as bank transfers or card-to-card payments. In addition to Naira, you can also withdraw to Perfect Money.
Yellow Card is another swap service active in Nigeria, Zambia, Kenya, and South Africa. With this service, you can sell your Bitcoin (as well as Ethereum and USDT) for Naira and a few other African currencies.
There’s some choice among them, after all.
When the Nigerian central bank banned all bank operations in one way or another associated with cryptocurrencies in February 2021, global exchanges had to comply and suspend both deposits and withdrawals in Naira.
Nevertheless, some of these exchanges found a few loopholes that effectively allow you to sell Bitcoin for Naira on them and withdraw the proceeds to your Nigerian bank account.
For example, Binance, the biggest cryptocurrency exchange in the world by trading volume, doesn’t allow you to sell crypto for Naira directly. However, you can use USDT as an in-between asset by first selling your Bitcoin for it and then converting USDT into Naira.
On the other hand, on Luno, a London-based cryptocurrency exchange with presence in Africa and South-East Asia, you can trade Bitcoin for Naira directly. The drawback is that, though, in order to withdraw Naira, you will need to create a voucher and redeem it with a third-party provider outside the exchange.
Such a sorry state may be due to change in light of Nigeria's securities and exchange commission recently recognising cryptocurrencies as securities. Under the new regulation, interested parties should acquire a license if they wish to offer crypto trading services.
But right now, it is p2p marketplaces that run the show in the Nigerian crypto space.
A typical p2p marketplace follows a decentralized model whereby cryptocurrency buyers interact directly with sellers, with the marketplace ensuring smooth execution of the trades by providing escrow services.
These platforms are major competitors to ordebook-based exchanges on a global scale. In Nigeria, however, they have become the dominant player in the domestic crypto market. They don’t need to open accounts in local banks to enable Naira trading and thus don’t come into the crosshairs of the Nigerian central bank, the mastermind behind the 2021 crypto ban.
With 220 million people, Nigeria is the 7th most populous country in the world, and like many other developing nations around the globe, this country suffers from high inflation (15th place according to the IMF data as of 2021).
Add to the mix the skilled and numerous Nigerian diaspora interested in cheap and fast cross-border money transfers, and it is easy to see why over 30% of adult Nigerians are already familiar with cryptocurrencies.
And that’s also the reason why so many global p2p marketplaces, such as Binance P2P and LocalBitcoins, are offering the Naira option today.
Bitpapa is one of those p2p marketplaces that recently entered the Nigerian crypto market. While it is relatively new to this market, it has been providing p2p crypto trading services worldwide since 2018, and that makes it all the more interesting to see what it’s got to offer to Nigerian crypto enthusiasts.
The marketplace is a trading platform that comes with a free multicurrency cryptowallet and helps cryptocurrency buyers and sellers from across the world find each other and make a trade to exchange crypto for fiat:
The service allows users to convert crypto into fiat in a secure and transparent way. On Bitpapa, you don’t need to deposit or withdraw fiat – the payment goes directly from the buyer to the seller without the marketplace involvement.
When you sell crypto, your coins get locked in an escrow account and you release them only after you receive the payment.
Despite the recent tendency toward tightening verification requirements across the crypto trading landscape, you can continue to remain anonymous on Bitpapa. Simple registration with an email or via the Bitpapa Telegram bot will do just fine. There are no limits on how much you can sell or buy with an unverified account, although some users may choose to trade only with verified users. But that’s on them.
Bitpapa allows you to sell Bitcoin, Ethereum, TON, Monero and USDT for Naira using a wide array of payment methods available in Nigeria, for example, bank transfers, card-to-card payments, electronic money and cash.
To sell Bitcoin on Bitpapa, you first deposit the cryptocurrency into the marketplace wallet using the address which is automatically generated when you sign up with the platform. After that, you find the best offer to buy Bitcoin by selecting the necessary filters and make a trade with the chosen buyer:
This process is essentially the same across all p2p marketplaces, so it shouldn’t cause any difficulties once you complete your first trade.
When you sell your coins using an existing offer, the marketplace doesn’t charge trading fees to you. Deposits are also free of charge (other than the transaction fees charged by the network). In this way, selling Bitcoin for Naira won’t cost you anything on Bitpapa.
And you don't need to disclose your identity here, either.
Due to reasons explained in this article, p2p marketplaces have become the platforms of choice to acquire cryptocurrency in Nigeria. But as there are always two sides to any trade (that is, the buyer and the seller), you can leverage this fact to your advantage when you need to sell some bitcoins for the Nigerian Naira.
Bitpapa is a p2p marketplace that will help you do that with the least amount of time, effort and expense.
Q: What Is the Cheapest Way to Convert Bitcoin to Cash?
A: Converting Bitcoin for Naira on p2p marketplace Bitpapa will only cost you network fees to deposit the cryptocurrency.
Q: What to Consider When Cashing Out Bitcoin?
A: First of all, you should consider the security of your conversion operation. Then, it all comes down to how easily you can do that and how much it will cost you (hint, on Bitpapa it will cost you nothing)
Q: What Is the Safest Crypto Exchange?
A: Because p2p marketplaces are not involved in fiat transactions and offer a protected trading environment, they are considered the safest place to trade crypto.
Q: Which App Can I Use to Convert Bitcoin to Naira?
A: p2p marketplace Bitpapa offers a mobile app that allows you to trade Bitcoin no matter where you are, in Nigeria or elsewhere.