Despite Bitcoin’s recent surge in popularity across the country, Nigeria is not exactly a crypto-friendly jurisdiction. And while it appears that things have started to improve lately, global exchanges are still staying away from the Nigerian crypto market. But where there is demand, there will be supply, and cryptocurrencies are no exception. If people want to trade Bitcoin, they will find a way.
Which makes it even more interesting to see what the free market has to offer them.
Why Cryptocurrency Is Rising in Popularity in Nigeria
Bitcoin’s meteoric rise in popularity is not coincidental. Apart from gaining steam as a vehicle of speculation, there are at least a couple of other, more commendable goals that fuel the growing interest in cryptocurrencies, both in Nigeria and across the world.
The first factor, which is limited access to mainstream financial services, has become a tell-tale sign of not just Nigeria but Africa as a whole. Lack of financial inclusion in this country as well as across the Black continent at large pushed many Nigerians toward using Bitcoin as an alternative to more traditional means of transferring value.
Case in point, there were 1.7 million Nigerians living outside Nigeria as of 2020 according to the UN data, with the United Kingdom being the preferred destination for the Nigerian expatriates (~180,000 Nigerian nationals living in the UK as of 2021):
Nigeria has a high poverty rate, and it is then little surprise that the remittances sent home by the rich and skilled Nigerian expats are a big contribution to the wellbeing of their families. Bitcoin makes a perfect value transfer vehicle in these circumstances.
As a quick aside, BitPesa, a remittance platform from Kenya, offers Bitcoin-based payments for a number of local currencies (including the Nigerian Naira).
The second factor, which is high inflation with a permanently depreciating currency, is not unique to Nigeria or Africa in general, but common to all developing nations around the world (Venezuela, Iran, Zimbabwe, Argentina, to name but just a few). For the population of these countries, Bitcoin has become a store of value and a hedge against inflation.
And while Nigeria doesn’t make it into the top-10 countries with the highest inflation across the board (coming “only” 15th, according to the World Economic Outlook databook by the IMF), its persistent inflation on the order of 15-20% per annum made many Nigerians turn to digital currencies in search of a safe haven.
Bitcoin is famous for its volatility, but so far it has always been making new highs at the end of day. There is good reason to believe this is not going to change in the future. After all, optimists always triumph in the end. Fiat currencies, on the other hand, never claim back the purchasing power they already lost to inflation.
All things considered, it makes sense to invest in cryptocurrency, and that explains Bitcoin’s popularity among Nigerians.
The next question will then be where to buy and sell Bitcoin in Nigeria.
Best Sites to Buy and Sell Bitcoin
If you are living in a crypto-friendly jurisdiction (say, Switzerland or Germany), you shouldn’t have any issues buying or selling crypto for your national currency. In Nigeria, however, it is much more complicated.
It should be obvious that the use of cryptocurrency for purposes described in the previous section is mirroring the area of application for a national currency. This is not a big deal in countries with strong currencies (such as Euro or Swiss franc). But in nations like Nigeria, Bitcoin is a threat to their financial systems.
As the Central Bank of Nigeria (CBN) sees it, cryptocurrencies are issued “by unknown and unregulated entities” and “well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion”.
No wonder the CBN banned all cryptocurrency-related transactions in February, 2021.
This forced all major cryptocurrency exchanges to suspend Naira deposits and withdrawals as these transactions required bank transfers internally, now illegal in Nigeria.
As you could have very well expected, the ban turned out to be an exercise in futility. Faced with the ultimate failure of their anti-cryptocurrency effort, the Nigerian financial authorities somewhat reversed their stance recently.
In May this year, Nigeria's securities and exchange commission (SEC) finally recognised cryptocurrencies – as securities. Today, the entities wishing to launch cryptocurrency exchange services in Nigeria should receive a "no objection" ruling from the SEC.
This flip-flop only caused users to move further from centralized exchanges such as Luno toward peer-to-peer (p2p) platforms. So instead of overseeing a few dozen exchange accounts opened in local banks, the Nigerian regulators now need to trace thousands of people transacting directly with each other.
And there’s not a single chance for them to tell which transactions are crypto-related and which are not.
As an old Chinese saying goes, follow the scent of money and you'll never go wrong. Unmistakably, the scent of money takes us to p2p marketplaces. These platforms are hands down the best sites to buy and sell your Bitcoin in Nigeria under current circumstances.
Start Trading Easily with Bitpapa
Many global p2p marketplaces support the Naira option. You can trade Bitcoin for Naira on Binance P2P, Remitano, Paxful, LocalBitcoins and a dozen of less known marketplaces. But here we will busy ourselves with inspecting a new player in the Nigerian crypto market, the Bitpapa peer-to-peer platform.
Registered in the UAE, the marketplace has been offering p2p trading services worldwide since 2018, and now it has entered the Nigerian market:
To start trading on Bitpapa, all you need to do is register on the platform by following the confirmation link sent to your email after you sign up with the marketplace.
The service doesn’t require ID verification nor there are any limits on how much unverified accounts can trade daily. Please take note, though, that if you choose to stay unverified and don’t confirm your phone number, traders who did so may enable the option of trading only with verified users and/or with confirmed phone numbers.
Peer-to-peer is about trading with your peers. Unlike orderbook-based exchanges, where your order is executed against other depersonalized orders, on a p2p marketplace you see the user who you are trading with.
Moreover, the buyer pays the seller directly without the service processing the payment on his behalf.
The marketplace only stores cryptocurrency, which is used as an escrow. The buyer knows that the coins he acquires will find their way into his wallet once he pays for them. And the seller can be certain that he gets the payment before the coins are released to the buyer.
By implementing this design, Bitpapa protects both the buyer and the seller.
At the moment, the platform supports BTC, ETH, TON, XMR and USDT, which you can exchange for a number of fiat currencies, including the Nigerian Naira:
The process of buying crypto on Bitpapa is simple, and involves the following steps:
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finding best offer
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opening a trade
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receiving payment details
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making payment
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receiving coins.
When you are selling crypto, it is you who provides payment details, checks the payment and releases the coins from escrow.
The marketplace doesn’t charge trading fees when you buy or sell crypto using an existing offer. In case you are not happy with the offers on Bitpapa, you can always create your own and start pocketing gains from the price action both to the upside and to the downside.
In addition to the website, you can buy and sell crypto with Bitpapa via a mobile app (available for Android and iOS) and a Telegram bot. The Telegram bot is unique to this marketplace, and it allows you to trade crypto with a few simple commands right in Telegram.
But Bitpapa is not about trading only.
The marketplace is also used as a remittance service – you can send and receive cryptocurrency from other users of the platform. As these transactions are internal and don’t hit the network, they are instant and free of charge.
For this purpose, you can also create a Bitpapa code and use it as a voucher. The user who receives this code from you can then redeem it and get his balance topped up. Instant and free as well.
Overall, Bitpapa does its job pretty well by providing a safe and secure service where you can exchange major cryptocurrencies for Naira – no matter what the Nigerian government thinks today or contrives tomorrow.
Road to Success
As the example of Bitpapa entering the Nigerian crypto market demonstrates so clearly, no amount of government intervention can stop or prevent anything that brings real benefits to people, at least not on the local level or something as global as Bitcoin. Cryptocurrencies offer these benefits, and they are here to stay.
That’s what underpins the success of p2p marketplaces – in Nigeria and elsewhere.
FAQ
Q: Do I Need to Buy a Whole Bitcoin?
A: No, you don’t. You can buy as little as $10 worth of Bitcoin on Bitpapa (around 0.00045 BTC currently).
Q: Which Mobile App is Best for Buying Cryptocurrency in Nigeria?
A: Bitpapa offers a simple but powerful mobile app that allows you to buy Bitcoin in Nigeria with your smartphone.
Q: Why is Bitcoin Price Different on Google?
A: The Bitcoin price across different exchanges and marketplaces may be different due to a host of factors such as, for example, the availability or lack of cheap fiat on- and offramps.
Q: How to Buy and Sell BTC with a Credit Card?
A: To buy and sell Bitcoin with a credit card, you need to find an exchange or p2p marketplace (for example, Bitpapa) that offers this option.
