Nigeria has more uptake of buyers of bitcoin than any other country in the world, second to that of the US. When bitcoin was first launched, the benefits of a payment method that cannot be influenced by the Government, provided a tremendous opportunity for Nigerians to take control of their finances.
Prior to the introduction of bitcoin, the Nigerian government held a tight control with the flow of funds via the banking system, which was the only way Nigerians could transact. Sadly, the Nigerian banking system has many system faults that include: high transaction fees, unreliable and lengthy processing times, and prone to misappropriation.
In comparison, Bitcoin is a better payment and storage method than the Nigerian banking system. The decentralized nature of bitcoin, prevents the manipulation by any one person or entity and therefore use of Bitcoin does NOT involve a bank or any third party. It is also relatively quick to process with cheap fees. Nigerians who have been frustrated with traditional banking transaction methods that are cumbersome, expensive, and open to exploitation now have bitcoin, which has literally been life changing.
As a Nigerian, I can attest to the popularity of bitcoin. Friends, family and colleagues use it often as a payment method, but it is also important to highlight that many use it as a form of investment. And sadly there are criminals out there who are creating schemes to scam you. But the pros by far outweigh the cons.
- Learn How to Get started with buying bitcoin in Nigeria.
- Read the reviews of exchanges you can use to buy bitcoin.
- Choose an exchange that meets your needs.
Top 5 Nigerian Bitcoin and Cryptocurrency Exchanges
How to Choose a Nigerian Bitcoin Exchange
There are several ways to buy and sell bitcoin. Often these ways are grouped into one category call an “exchange”. However there are actually minor differences with the various platforms that can be used.
Some of these exchanges are brokers, peer-to-peer, and some even serve as trading platforms. As a user, there is no real obvious difference. The process of using them are exactly the same.
To use these exchanges, you need to open an account with them and fund the account via any of the supported payment methods.
When choosing an exchange, there are so many factors to keep in mind. These may include safety and security, reliability, coin pairing, fees, and regulations.
None of the exchanges I reviewed in this article are licensed in Nigeria. This is NOT an issue as Nigeria has no laws regulating the use of cryptocurrencies. But if you have a complaint, there is no recourse since all the exchanges are based at offshore jurisdictions.
Safety and Security
Consideration to Safety and Security is very important. There has been many investors who have lost their funds due to an exchange being hacked. In addition, there have been instances of investor personal data unintentionally leaked to the public, posing a huge risk to users. Hackers are becoming more active with using personal information to spam or phish, which is means as a user you should be aware of weaknesses of some exchanges.
When choosing a cryptocurrency exchange, consider whether it has two-factor authentication (2FA). This helps validating your account sign in and keeps safe your transactions. 2FA involves using a third party device such as your smartphone or email to send a Confirmation Code, as an extra layer of security.
Lastly, checking the exchange’s history may reveal if it has been prone to hacks. Of course, if it hasn’t been hacked, this doesn’t mean it won’t happen. But it gives greater assurance that the exchange is relatively secure.
Though there are many exchanges which can be relied upon to have top quality safety and security for its users, it is ALWAYS PRUDENT TO TRANSFER YOUR BITCOIN TO A COLD WALLET after buying them.
Customer Support
As with any software that you use, there will come a time when you will need to reach out to customer support to ask questions and get clarifications.
Responsive and accessible customer support is important when choosing an exchange to trade Bitcoin. If you are a beginner, an exchange with good customer support can lead you through how to trade Bitcoin on their platform.
Payment Methods
Another area of consideration before you choose an exchange is the ease of deposit or Withdrawal. Popular payment methods include credit/debit cards, bank transfers, Skrill, Neteller, Perfect Money and Bitcoin deposit.
Sadly, PayPal has blacklisted Nigerians from accessing its services due to money laundering activities.
Cryptocurrency Selection
Big exchanges offer a wide range of cryptocurrencies for their users to choose from. As a Nigerian trader, before you choose any exchange, check to ensure that the exchange supports different fiat currencies, including the NGN and major cryptocurrencies. One of the benefits of funding your trading account with the Nigerian Naira is that you won’t pay conversion fees. Other than that, you would pay fees to convert from NGN to the supported fiat currencies.
Coupon and Discounts
Avoid exchanges that use high-level marketing pitches at all costs. Don’t fall for their tricks. Before you choose an exchange to trade Bitcoin, you should do a Google search to check if there are any coupons and deals you can take advantage of to save on fees and other sundry charges. Then sign up and use the coupons. To avoid choosing a scam exchange with “too good to be true” coupons and deals, I recommend you choose from this list.
Fees
Every exchange charges their users differently. This makes comparing exchanges extremely difficult when simply looking at their fees. There is no standardization, but the most common method of fee calculation is via taking a small percentage of the amount traded.
Usually, the commission is less than 1% per transaction, but reduces if trading volumes significantly increase. Also, be aware that deposits and withdrawals may also incur fees. These aren’t imposed upon by the exchange, but rather the payment provider. The exchange, however, may seek to pass on these fees to the user.
Now, this doesn’t mean that you should go out there and pick the exchange with the lowest fee offering. You need to balance the safety and security and other aspects that we mentioned. Don’t just go straight to the lowest fee exchange, because you could end up frustrated or worse still – scammed.
Platform Reliability
The last thing you want to do is to trade on a platform that is not reliable. The best cryptocurrency exchanges use expert developers to design their trading platforms. If you trade on an unreliable platform, the exchange rate may move against you if the platform crashes. If you are unsure of whether an exchange is reliable, do a quick search on the internet for feedback from users. You will undoubtedly find many comments by users venting their anger if the exchange in unreliable.
Liquidity
Liquidity is the volume of buyers and sellers on the exchange. A high volume translates to high liquidity, because you will be able to find someone to transact with relatively quickly. Without high liquidity it becomes hard to buy and sell Bitcoin. If there is no one to buy bitcoin from, you will have no choice but to wait until there is one.
This presents a risk that you will lose out on exchanges if they move against you, and it will cause you financial stress if you are in urgent need of cash.
Regulation
Where the exchange resides for Regulation is important. For the most part, if they are located and based in Nigeria, then the exchange would be regarded as one of the most safest for Nigerians. This is because, the laws of Nigeria would apply, and should there be any dispute resolution required, Nigerians can easily follow the Nigerian local laws as a path of recourse.
Having said that, there are no laws in place to regulate the cryptocurrency market in Nigeria. But there are established financial services laws which do apply.
Choosing an offshore established exchange is an option for Nigerians. There are no laws preventing Nigerians from doing so. In doing so, remember that each exchange is regulated by the laws for their jurisdiction. The more stringent the laws, the more onerous will the Know Your Client requirements be.
Nigerian Cryptocurrency Exchange Reviews
Nigeria is home to millions of Bitcoin traders. With so many cryptocurrency exchanges on the Nigerian cryptocurrency market, it can be overwhelming to choose an exchange that would meet your trading needs. Hence, I have put together a list of the best 5 exchanges to buy Bitcoin in Nigeria. These exchanges range from locally operated to worldwide market leaders with good offerings for Nigerians.
Binance
Binance doesn’t need much introduction, as it is a known brand as far as the cryptocurrency exchange market is concerned. Binance has recently extended its reach to the Nigerian market. In 2020, the company hosted a Bitcoin masterclass in the ancient city of Benin, Nigeria. The masterclass was organized to further create awareness about Bitcoin and blockchain technology.
Following a partnership with Flufferwave, Nigerians can now buy Bitcoin and over 199 altcoins with the Nigerian Naira. Additionally, Binance has a peer-to-peer marketplace that doesn’t charge a fee when users buy or sell Bitcoins.
LocalBitcoins
Another great option for buying Bitcoin in Nigeria is to use LocalBitcoins. This exchange supports a wide variety of payment methods, including Skrill, Perfect Money, Bank transfer, and debit/credit cards. Once you place an order to buy Bitcoin, the seller will fund an escrow wallet with the amount of Bitcoin requested.
In turn, the buyer would transfer the Naira equivalent to the seller. Once the seller confirms receipt of payment, LocalBitcoins would then release the Bitcoin to the buyer. Should there be any disagreement in the deal, LocalBitcoins would lock the BTC in escrow until the buyer and seller resolve their differences.
NairaEX
NairaEX is the first indigenous cryptocurrency exchange in Nigeria. This exchange only accepts only one fiat currency, which is the Nigerian Naira (NGN). As a Bitcoin enthusiast, you can only buy/sell Bitcoin with NGN.
NairaEX currently supports Ethereum, Litecoin, Bitcoin Cash, and Bitcoin. Fees are baked into each asset you want to trade, as there are no additional fees for buying Bitcoin. The current spread is displayed on NairaEX’s homepage. Traders can buy Bitcoin via Bank transfer, Perfect Money, or with the use of their credit/debit cards.
Bitpesa
Bitpesa is another cryptocurrency exchange that Nigerians can buy Bitcoin from. The company sells Bitcoin through the popular M-PESA mobile payment service. Bitpesa has a heavy presence in Nigeria and two other African countries – Uganda and Kenya.
To buy Bitcoin, Bitpesa supports credit/debit card payments and Paga accounts. If you are based in Uganda, you can buy Bitcoin using your MTN or Airtel line. For Kenyan residents, you can buy Bitcoin via bank transfers, Perfect Money, Skrill, and credit/debit cards.
Luno
Established originally as BitX in 2013, Luno has since grown to become a force to reckon with on the Nigerian cryptocurrency market. Although Luno derives most of its trade volume from South Africa, it is also popular in the Nigerian market. Luno is also servicing cryptocurrency traders in Uganda, Indonesia, Europe, and Malaysia.
Luno’s mission is to provide competitive cryptocurrency exchange services like Coinbase and Binance. The exchange supports Ethereum, XRP, Bitcoin, and Litecoin.
Nigeria Bitcoin ATMs
The convenience of using Bitcoin ATMs hasn’t quite taken off around the world. In the US, you will be able to find quite a few ATMs scattered in the various states, but in Nigeria the same cannot be said.
Bitcoin ATMs are convenient, but they also offer the worst exchange rates and charge the most fees. In additions, there are daily transaction limits, and some only accept Withdrawals or Deposits only.
