How to Invest in Bitcoin in Nigeria Despite Ban in 2022

How to Invest in Bitcoin in Nigeria Despite Ban in 2022

Last Updated on October 18, 2022

Nigerians are some of the biggest cryptocurrency users on the African continent and in the world as a whole. And more and more Nigerians continue to jump on the bitcoin train as they seek ways to invest in bitcoin in Nigeria with the Naira declining with each passing moment.

If you’re one of the people looking for how to invest in bitcoin in Nigeria, I’m sure you have some questions. What if cryptocurrency or bitcoin is legal? if bitcoin has been banned in Nigeria and the ultimate question: how do I invest in bitcoin in Nigeria? Amongst many other questions.

In this guide, we will answer those questions and more and try to leave you more confident in your decision to invest in bitcoin in Nigeria.

But first, let’s take a look at the elephant in the room. What is cryptocurrency? what is bitcoin? What can you do with it?.

Let’s get to it.

Also See: Best Apps for Cryptocurrency Trading in Nigeria

What is Bitcoin?

Bitcoin is a cryptocurrency. Cryptocurrencies are digital money that uses encryption techniques as means of securing the verification of transactions. Cryptocurrencies doesn’t need any financial institution to be transacted e.g banks.

Other than Bitcoin there’re thousands of other cryptocurrencies often referred to as Altcoins. e.g Ethereum, Solana, Dogecoin etc.

You simply send or trade cryptocurrencies with other people online freely without the need for anyone’s financial information. This is possible because of the Blockchain – a decentralized, trust-less ledger system used to record every transaction. The Blockchain offers fast transaction speeds, cost-effectiveness( no need for middlemen like your CBN) and also privacy

Bitcoin is digital money that is not controlled by any single individual, organisation or government rather is controlled by Bitcoin users around the world.

Is Bitcoin Banned in Nigeria? Is Bitcoin Legal in Nigeria?

No Bitcoin isn’t banned in Nigeria because it cannot be banned. Because of how cryptocurrencies became popular in Nigeria, The Central Bank of Nigeria (CBN) imposed a ban preventing banks and other financial institutions from processing transactions for cryptocurrency exchanges serving the Nigerian market. 

However, this doesn’t Nigerians from buying, selling and trading bitcoin or any other crypto in Nigeria for that matter. There are platforms that allow you to easily purchase or invest in bitcoin in Nigeria using suitable payment methods.

Regarding the legality of bitcoin in Nigeria, some countries have labelled bitcoin as illegal, it isn’t really possible to stop people from selling buying or investing in bitcoin.

So yes bitcoin is legal in Nigeria as there are no laws stopping or restricting people from using bitcoin or other cryptocurrencies in Nigeria.

Read: How to Buy Cryptocurrency in Nigeria

How Much does it Cost to Start Investing in Bitcoin in Nigeria?

You can start investing in Bitcoin with as low as N500  depending on the platform you’re using. Using bitcoin or cryptocurrency is a journey and you can start small and build from there. But if you want to really test the crypto waters I suggest that N10,000 is a great place to start investing in bitcoin in Nigeria.

How to Invest in Bitcoin in Nigeria (Step-By-Step Guide)

To invest in bitcoin in Nigeria or other crypto assets there are certain steps you have to follow, no matter the cryptocurrency exchange, platform or service you use:

1. Choose Bitcoin (Crypto) Wallet: When you buy bitcoin or any other crypto, you’ll need to store it, so you need access to a crypto wallet. You can use a hot or cold wallet for this. Hot wallets include wallets provided crypto exchanges, crypto platforms, desktop software wallets or crypto apps. Here are some of the best crypto and bitcoin wallets in Nigeria.

2. Choose where to buy your Bitcoin from in Nigeria: There are a bunch of apps, platforms and sites to buy bitcoin in Nigeria. it is important you find a reliable one that is suitable for you. These platforms for purchasing crypto can be divided into three; Crypto brokers, Cryptocurrency trading platforms and Peer-to-peer (P2P) exchanges. Crypto brokers usually offer easy payment methods like bank transfers or debit card payments to users. Crypto trading platforms on the other hand gives users the ability to easily trade cryptocurrencies by allowing them easily deposit fiat money (like Naira and dollars) so they can use it to purchase coins that they want to trade. While P2P exchanges enable people to easily buy cryptocurrencies from other people by matching buyers and sellers and using an escrow system to make sure that neither the seller nor buyer is scammed. The best crypto platforms tend to offer two or all of these features.

3. Buy Crypto: This is where you buy any crypto of your choice, which means you’ll have to create an account with a crypto broker or exchange that allows Naira payments. Almost all crypto platforms will require a Know-Your-Customer (KYC) process before you can start buying bitcoin or any of the altcoins. This process involves verifying your identity with a valid identification document. After this process is complete, you can now go ahead and buy any cryptocurrency you want using any payment method that is suitable for you. Just make sure you check the total cost for the transaction before confirming your purchase.

Also Read: CBN’S Cryptocurrency Ban in Nigeria – The Latest & The Whys

What is the Best Platforms, Sites & App to Invest in Bitcoin in Nigeria?

Some of the best platforms, apps and sites to buy bitcoin from in Nigeria are:

  • Binance
  • Remitano
  • Bundle
  • Paxful
  • Buycoins
  • Quidax
  • Nairaex
  • Kraken

For a more rounded perspective on the best places to buy bitcoin in Nigeria: check out this resource on the best sites to buy bitcoin in Nigeria

What is the Best Bitcoin wallet in Nigeria?

The wallet you choose to store your bitcoin or cryptocurrencies on is very important as it can be the reason why you get to keep or lose them. Some of the best bitcoin wallets in Nigeria are Trust wallet, Paxful, Bundle, and Coinbase amongst others.

Payment Methods for Buying Bitcoin and other Cryptocurrency in Nigeria

If you’re going to invest in bitcoin in Nigeria, then you need payment methods that are suitable for you. Here are some of the payment methods for buying bitcoin in Nigeria:

Credit/debit card: It’s very convenient to use cards to buy bitcoin and other cryptos despite the processing fees they incur. However the recent CBN crypto restrictions mean it is not possible to buy Bitcoin and other crypto assets using naira credit or debit cards. 

Bank transfer or deposit: The current CBN crypto policies mean Nigerians have had to turn to bank transfers to purchase cryptocurrencies through Peer-to-peer crypto exchanges. P2P allows Nigerians to invest in bitcoin in Nigeria by paying through bank transfer. P2P is one of the cheapest ways to buy cryptocurrencies, as it is a direct purchase between buyers and sellers with no middlemen.

Cash payments: This payment method involves using cash (naira or any fiat currency) to buy bitcoin or altcoins. You can do this using LocalBitcoins; which allows you to find a local crypto vendor who accepts cash payments. Otherwise, you can use a Bitcoin ATM to buy directly, however, Bitcoin ATM fees tend to be high compared to other payment methods.

Cryptocurrency Trading Strategies – Things to Consider Before You Invest in Bitcoin in Nigeria

There are a lot of people making millions from investing in bitcoin but there are way more people losing millions if not billions as well. That is why it is important to be careful and thorough with the crypto assets they choose to invest in. You need to DYOR (Do Your Own Research) about a crypto asset before you put your money in it.

You shouldn’t even be investing in any asset talk more of cryptocurrencies without an investment strategy.

Most crypto investment strategies tend to revolve around the long-term (HODL) and short-term cryptocurrency strategies.

HODL (Hold on for dear life) or long-term crypto investment strategy involves holding crypto investments for a long period (say a year or more). This isn’t as easy as it seems because you have to weather a lot of market fluctuations and having the discipline not to take out your funds, which might be the wrong time to.

While a short-term crypto investment strategy is a strategy that involves investing in bitcoin or altcoins for a short period of time; say a period of some minutes, hours, days or months. With the view to earning from changes in prices of crypto assets over a short period of time.

Bot long-term and short-term investment strategies have their pros and cons but here are some questions to ask before deciding what to do:

  • What are the long-term and short-term winners of cryptos) and how do you allocate them?
  • How are you going to invest in your selected crypto coins, how are you going to split your capital into each coin?
  • When pulling out your profits or gains will it be based on timing, value or worth?
  • At what gain percentage or fiat value would you take out your earnings?
  • Are you investing more than you can afford to lose right now?
  • What sort of situations will you be forced to sell out all your investments?

And here is the best approach investment strategy to use when you want to invest in bitcoin in Nigeria:

  • You need to only invest what you can lose now. Do not invest money that you cannot afford to lose. Nothing is guaranteed about the cryptocurrency market as it is very volatile. You should have it at the back of your mind that any money you invest is at risk. Don’t invest capital you can’t risk.
  • make sure to write down your investment goals, strategies and targets
  • Track everything and also try to experiment between active trading and passive investment
  • Try to put 80% of your entire crypto investment in cryptocurrencies that have long-term potential by checking their historical performances in the market cap as well as the purpose of the cryptocurrency (what problems it solves and needs its fill). You can use CoinMarketCap for your research. You can use the other 20% for short-term trading.
  • Diversify Your Cryptocurrency Portfolio. You shouldn’t put all your eggs in one basket., this is what it means to diversify your investment in cryptocurrencies. This will help your portfolio withstand negative market events so your portfolio doesnt lose too much value. You can spread your investment around 6-10 coins instead of just two coins which can really destabilize your portfolio.

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