There are many ways to buy Bitcoin in Nigeria, but it is not about Bitcoin only. Fortify your Bitcoin with Ethereum for a robust and efficient crypto portfolio.
The two leading cryptocurrencies, Bitcoin and Ethereum, are often pitted against each other as though you couldn’t buy both and profit from whichever gets ahead. We first discuss why it is not a good idea to paint a black-and-white picture in the context of choosing between the two, and then proceed to address the issue of buying Bitcoin (and Ethereum) with Naira.
Read on to find out why and how.
Bitcoin vs. Ethereum
Ethereum supporters have recently become ecstatic as their favorite crypto is about to switch from a power-hungry PoW algorithm to a more energy-efficient and scalable PoS model. Despite the crypto winter setting in, Ethereum was consistently eating away at Bitcoin’s market share over half July and the best part of August.
Its price action against the king of cryptos confirms this trend:
The process of transitioning to the new model has come to be known as the Merge and is expected around September 15 or 16. There is little doubt that after the successful Merge Ethereum will perform even better – but only if Bitcoin itself doesn’t fail.
Up till now the entire crypto market has been following closely in the wake of its battleship, and Ethereum, just like the rest of the pack, could only rise when Bitcoin was rising. If Bitcoin was falling, Ethereum fell even harder.
So which one is better?
Your investment philosophy (that is, how you invest) determines not only what assets you invest in, but also your approaches to investing (like day trading or value investing). After all, there are many ways to earn money in the market, even if the goal remains the same. And some instruments are better suited to specific approaches than others.
Then, if there is a mismatch between your ways of trading and the assets you invest in, you will be underperforming at the very least. It means that it is incorrect to compare Bitcoin vis-à-vis Ethereum without at the same time specifying how these instruments are used to achieve what you are looking for.
Put differently, with Bitcoin you will likely get better results using one set of strategies and with Ethereum another.
More specifically, the chart above clearly shows that Ethereum is by far more volatile than Bitcoin (when both are priced against USD or Naira, or any other yardstick). You will get better results with Ethereum as a vehicle for short-term speculation and Bitcoin as a long-term investment hedge than Bitcoin for short-term and Ethereum for long-term.
If you tend to disagree, well, the price history of these two cryptos is your friend then. Hint, Bitcoin rose from 0 to $68k, while Ethereum from 0 to $4.5k only (and no, normalizing circulating supply won’t help).
But the truly interesting thing is that no one forces you to think in the “versus” paradigm and stick to just one cryptocurrency – either Bitcoin or Ethereum. You can add both to your portfolio, and as long as you employ the right trading strategies, you will do just fine.
With that established, the next thing is to find the place where to buy these cryptos.
The Right Place to Buy Bitcoin in Nigeria
While the number of places where you can buy Bitcoin and Ethereum for fiat (like the US dollar) is huge, the choice isn’t as vast when it comes to buying crypto for Naira (NGN). The reason is simple, though.
The Nigerian authorities are not very happy with Bitcoin and its friends. Diaspora remittances are one of the major sources of money flowing into the country, and Bitcoin’s use as a value transfer vehicle across borders has been on the steady rise since at least 2015. But Bitcoin transactions are hard to trace and as hard to tax.
No wonder that the Nigerian central bank tried to curb the use of cryptocurrencies in the country by ordering all financial institutions to close accounts of individuals and entities who are known to transact in crypto.
As a result, there are only a few centralized exchanges that are still standing in Nigeria – where you can trade NGN for crypto, with some caveats. Binance offers you a USDT:NGN trading pair (so it takes 2 steps to buy crypto with Naira) and you can buy some cryptos with it on Luno, although you have to use vouchers to deposit and withdraw Naira there.
It’s no surprise either that under these circumstances p2p marketplaces quickly took over the Nigerian crypto market. As they don’t transact in fiat, they are not bound by the central bank’s restrictions and regulations. It is their users who are paying each other directly without any involvement from the marketplace.
A bunch of p2p marketplaces offer the Naira option today (Binance P2P, Remitano, Paxful, LocalBitcoins, to name a few), and further we explore one such marketplace – Bitpapa, a newcomer to Nigeria.
Building Your Crypto Stash with Bitpapa
Bitpapa isn’t an entirely new name in the industry – it’s been active in crypto since 2018. Now the marketplace entered the Nigerian crypto space, and we can only welcome this development as Nigeria, with its +200M population (which makes it the 7th most populous country in the world), has enormous potential for cryptocurrency adoption.
The process of purchasing crypto on Bitpapa is similar to other p2p marketplaces and consists of the following stages:
- signing up & verifying identity
- finding best offers
- making a trade
- withdrawing crypto
You can buy both Bitcoin and Ethereum for Naira here (as well as TON, XMR and USDT), so it’s already a good start for building your personal crypto stash.
Let’s see how you would do that in practice.
Signing up & Verifying Identity
The sign-up process is simple and straightforward – all you need is a working email to confirm your registration with the service. Unlike many other exchanges and marketplaces, Bitpapa doesn’t force identity verification on you before you can make a single trade. Neither do you need to confirm your phone number.
You can remain unverified on Bitpapa as long as you see fit.
On the flip side, though, other marketplace users who confirmed their phone and verified their identity may refuse to trade with you unless you meet their requirements. And Bitpapa can’t force them, either. So it’s between you and other users.
Finding best offers
On a centralized exchange, you can only trade at the current price as determined by the balance of bids and asks in the exchange orderbook (or sit on your hands until the price reaches your target level).
On a p2p marketplace, you can choose who you trade with and at what price.
And to do that, on Bitpapa you filter the available offers to sell crypto by the cryptocurrency you want to buy, fiat to pay for it, and the payment method you prefer to use:
The marketplace filters the offers according to your preferences and shows them to you sorted by price in either descending or ascending order. You can then choose any seller regardless of their order in the list:
Optionally, you can create your own ad to buy crypto and set the price to your liking.
Making a trade
Peer-to-peer marketplaces offer one of the safest trading environments in crypto space. On the one hand, they don’t store users’ money, so they can’t possibly make off with it. On the other, the crypto they store is used to secure the trade so that both the buyer and the seller go through with it as expected.
When you have found a good offer to sell BTC, you open a trade with the seller:
The required amount of the seller’s crypto gets locked by the marketplace as an escrow until you pay the seller in full. After that, the seller releases the cryptocurrency and everyone gets their due according to the trade terms.
If the seller doesn’t release the coins by himself on receiving your payment, you raise a dispute, and after you post the proof of payment (for example, bank statement), the coins are released by the marketplace itself.
This design helps both counterparties live up to their commitments.
Withdrawing crypto
As soon as the coins hit your Bitpapa wallet, which happens instantly after they are released by the seller, you can withdraw them to an external address:
Alternatively, you can continue on your journey toward building a solid cryptocurrency portfolio made up of Bitcoin as well as Ethereum right on Bitpapa.
Lesson to Take Home
Smart investing assumes building a diversified portfolio of assets that start to play out at different times and under different conditions. While Ethereum and Bitcoin prices are highly correlated, their volatilities are definitely not, which contributes to a profitable combination of these two assets in one portfolio for short-term trading and long-term investing.
And now you know where you can begin to build such a portfolio with Naira.
FAQ
Q: What Are the Differences between a Bitcoin Exchange and Wallet?
A: You can use an exchange account for storing your Bitcoin (even though it is not recommended), but you can’t use a Bitcoin wallet such as Electrum for trading
Q: What Is The Best Site To Buy Bitcoin In Nigeria?
A: It is a matter of preference, but you may want to try out Bitpapa, a global p2p marketplace
Q: How to Convert Your Bitcoin to Naira?
A: You can convert Bitcoin to Naira on centralized exchanges and p2p marketplaces. A few payment systems (for example, BitPesa) also offer this option
Q: Why Should I Buy Bitcoin?
A: If you ask this question, you probably shouldn’t. Otherwise, people buy Bitcoin for a host of reasons, for example, to use it for cross-border payments and as a store of value
