How to start cryptocurrency trading in Nigeria

In this blog post, I'll reveal how you too can join the few people packing cryptocurrency money every day in Nigeria. This information will help you if you are located in other countries too as this guide is applicable to people who want to start cryptocurrency trading from anywhere in the world.

The cryptocurrency industry is becoming fast growing and widely accepted across the globe with key players in the economy joining the league.

Cryptocurrency is a digital assets that can be used for payment processing or as a legal tender commodity by itself. Most cryptocurrencies we have in the world are decentralised meaning, there's no central authorities or governments controlling or regulating its use. They store their transactions in a distributed ledger called blockchain which is saved securely on the computers of users on the network.

Cryptocurrencies are volatile which makes them very risky to invest. You can earn big and at the same time lose big if you don't play your games well. This is why trading cryptocurrencies and hedging against losses through informed decisions is essential than just HODLING and that's why I will be revealing how you too can get started with trading cryptocurrency and earning profit by yourself.

Basics of cryptocurrency trading

Trading cryptocurrency involves buying certain cryptocurrency assets when the price is expected to increase (that is, when it's low) and selling it off at point the price is expected to fall (when it's high). This technique of cryptocurrency trading involves analysing price movements through the use of indicators, looking out for signals for next price trends. Common indicators used in technical analysis of cryptocurrency price include trendlines, channels, moving average and momentum indicators. It's noteworthy to know that, the decision of traders based on technical analysis of price charts is subjective rather than objective. So, trader's decision in the market is more based on their experience with the price chart and the asset being traded. The intrinsic skills in trading cryptocurrency or any asset is in identifying the supports and resistance levels which are basic indicators that traders look out for in making decisions whether to buy or sell an asset.

Why you should start trading cryptocurrency

The cryptocurrency is billions of dollars in market cap and this is just a fraction of the fiat currency in circulation. This shows that the cryptocurrency is still young and fast growing. Many institutional investors are joining the fast and robust economy which has the potential to replace the traditional currency. This is a strong reason why you should invest in this economy as early adoption will give you an edge over others as the world gradually becomes digital. So, trading cryptocurrency now and building your digital portfolio could be a smart long term investment as the prices of these digital assets are bound to increase as the world slowly adopt them. Trading cryptocurrency on the other hand could be a good short term investment that is capable of financing your dialy needs.

How to get started with cryptocurrency trading in Nigeria 

The first steps in start your cryptocurrency trading journey is to open an account with any cryptocurrency exchange of your choice. One of the best cryptocurrency exchange I recommend is Binance. They are one of the biggest exchange in the world and they offer wide range of crypto products. To register a cryptocurrency trading account with Binance, click here.

Once you have registered a cryptocurrency trading account with your preferred cryptocurrency exchange, your next steps is developing your cryptocurrency trading approach to making money.

See Also: The easiest way to convert your airtime to cash in Nigeria

Different ways to make money trading cryptocurrency in Nigeria

The cryptoworld is dynamic and full of different ways to earn money. Since cryptocurrencies offer diverse opportunities and possibilities, the different ways to earn money from cryptocurrency are endless. Below are highlights of the various opportunities available to earn money in Nigeria trading cryptocurrency.

1. Trading cryptocurrencies on P2P exchange

P2P offers unrestricted opportunities for crypto traders around the world to trade directly with eachother through a secure escrow. Since transactions are peer-to-peer, cryptocurrency traders in countries like Nigeria where cryptocurrency is banned can use P2P exchange to buy and sell cryptocurrencies freely. Cryptocurrency P2P exchanges offer different payment methods to buy and sell cryptocurrencies in different regions of the world. With these types of opportunities, crypto traders all around the world can leverage on the different prices of cryptocurrencies in different countries/markets to buy and sell cryptocurrencies at the best prices. One of the approaches used by cryptotraders in Nigeria is arbitraging.

Arbitraging involves constantly looking out for discrepancies in prices of cryptocurrencies between different exchanges and buying cryptocurrency from exchange with lower price and selling on exchange with higher prices. They do this by looking out for new offers or ads on P2P with best prices to buy from.

Currency exchange is another opportunity offered by cryptocurrency. With the difficulty with which it is to get Forex in Nigeria due to Central Bank of Nigeria (CBN) policy that limits Forex access to people, Nigerians go easily exchange their Naira to currency in any country they find themselves without having to bother about hassle of getting Forex for their various needs. This approach involves buying cryptocurrencies with Naira and then selling it for any currency of choice. With this you can even make money by helping people get unrestricted access to Forex in Nigeria.

HODLing is another way you can make money by speculating on the long-term value of a cryptocurrency asset. This involves buying a cryptocurrency you believe will appreciate in value in the future and then selling it when the value goes up! You could make as much as x100 of your investment if you buy the right cryptocurrency asset! Crypto traders in Nigeria could use this approach in speculating on US dollar. Since Nigerian Naira is fast losing its value against US dollars, crypto traders in Nigeria could hedge against this decline by buying USD stable coin like USDT, an indirect way of holding US dollars. This approach is much safer as the value of USDT and other stable coin is pegged to US dollars and thus, there's no risk of losing the value of your asset due to price fluctuation.

Binance as one of the leading cryptocurrency exchange in the world have a P2P cryptocurrency exchange where cryptocurrency users across the globe trade with one another.

2. Trading cryptocurrencies on Spot exchange

The crypto spot exchange offers diverse opportunities to trade in and out of any cryptocurrency asset within the crypto exchange itself. It offers many different cryptocurrency pairs and make converting one cryptocurrency to another seemless. Just like the P2P exchange, the spot exchange makes buying and selling cryptocurrencies easier, the only difference here is that for P2P, there's limit on the numbers of cryptocurrencies you can trade and trading is between crypto peers instead of within the exchange itself. Since P2P facilities trading with fiat currency of your country, it's the first steps in buying cryptocurrencies. Once you are able to buy your cryptocurrencies you can then trade it for a different cryptocurrency of your choice in the stop exchange.

Same similar strategies outlined under P2P are applicable as well on Spot exchange. You can make money through arbitraging and HODLing or just buying when the price of a coin is low and selling it when the price goes up.

3. Margin or futures trading (very risky)

This approach magnifies your profit/losses, so you need to be very careful. Trading cryptocurrencies on futures exchange offers the opportunity for traders to make money irrespective of the price direction. Unlike spot exchange that only let you profit only when the price of the cryptocurrency you are holding goes up, you can make money on margin and futures exchange by short selling the price of a cryptocurrency and profiting from it when it price goes down as predicted, but if the price goes up you risk liquidating your whole asset! This is why margin or futures trading is very risky as your whole investment can be lost if trade goes wrong. In spot, you can always wait for price to get to the value you are comfortable with selling at, whereas in margin/futures, there is a price beyond which all your asset becomes liquidated and lost totally.

4. Cryptocurrency staking and DeFi

There was a period of time during the 2019/2020 when the crypto market was booming in the DeFi space. Crypto traders were earning crazy APR as high as 1000% or more by simply staking or locking their funds in DeFi protocols earning yields in return for staking their assets. There are several different ways to participate in decentralised finance, staking your assets in yield protocol is just one of the ways. One of the safer approach is staking stable coins and earning APR on them. Since the value of stable coins are fixed to their corresponding fiat value, you don't have to worry about fluctuation in value of assets associated with cryptocurrencies. Another important function of decentralised finance is the lending and borrowing. You could simply earn interest by lending your cryptocurrency out.

To participate in DeFi, you can do so directly through online crypto wallets like Trust wallet. You can also stake cryptocurrency and earn APR directly on centralised exchange like Binance.

5. Participating in NFT (nonfungitible token)

The NFT marketplace is another booming sector of the cryptocurrency space. The NFT has provided opportunity's for artists and creators around the globe to easily monetise their work and earn commission any time a piece of their artwork is sold as NFT. Crypto traders can buy, earn and collect rare NFT and sell later for a higher price.

To participate in NFT, you can register on popular NFT marketplace like opensea and start selling your artwork as NFT!

6. Participating in crypto rewards or affiliate programs

The cryptoworld offers diverse opportunities to earn and one of the ways is through rewards program or even the popular affiliate marketing. If you are an affiliate marketer in Nigeria or are willing to go into affiliate marketing, you can start with signing up into affiliate programs of various crypto companies and projects and earn rewards for doing so!

Lots of cryptocurrency exchanges out there like Binance have affiliate programs you could sign up with and earn commissions for each user you referred.

7. Participating in crypto airdrops

Airdrops are another ways crypto users can earn free money by participating in airdrop programmes of new crypto projects.

Airdrop is a way new cryptocurrency projects enter the crypto space by distributing their token to users. It encourages more decentralisation and community participation in governance of the project.