Cryptocurrency trading is gaining more momentum among Nigerians, especially the youths, more than a year after the Central Bank of Nigeria (CBN) prohibited banks and other financial institutions from facilitating cryptocurrency transactions.
Nigerians trading cryptocurrency shifted to the peer-t0-peer form of trading after the CBN ban.
A recent report from Chainalysis, a global crypto platform, shows that Nigeria emerged as the sixth leading nation in the world in cryptocurrency adoption.
Citing recent research conducted by KuCoin, analysts at CSL Stockbrokers said in a new report that 33.4 million Nigerians, or 35 percent of those aged 18 to 60, have owned or traded cryptocurrencies in the last six months.
They said 52 percent (about 17.3 million people) had distributed more than half of their wealth into the asset class, adding that 70 percent of the crypto investors vowed to increase their exposure by the end of 2022.
The analysts noted that the research revealed that the majority of Nigerian crypto holders entered the market many years ago, but about 26 percent began investing six months ago, driven by the 2021 bull run.
“We note that the rising number of Nigerians patronising cryptocurrencies reflects the dearth of high-yielding investment options amidst a significant decline in the purchasing power of households caused by multiple devaluations and high inflation,” they said.
According to Emmanuel Usen, a crypto community manager and educator, there are numerous opportunities in the crypto market and many Nigerians are keen to harness them.
“The reason why many Nigerians are still interested in the market is the number of opportunities that exist in the crypto space which is beyond imagination. People go into the space and find their niche,” he told BusinessDay.
According to him, the market has niches like Decentralised Finance, where activities like staking, and play-to-earn gaming are carried out, and offers platforms where individuals venture into future trading with the aid of technical analysis on centralised exchange.
He said: “The profits here are much as you also see people flipping non-fundable tokens (NFTs) like $150 to as much as $20,000 in a day. People grind full-time on NFTs every day and take it as a full-time job, enabling them to earn with ease.
“New financial innovations, ideas, trends and phenomena constantly coming inside the crypto community are another factor driving more Nigerians into the crypto market which enable them to stay updated and informed while achieving their financial goals.
“Recently, we have what we call ‘move to earn’ where you move around and do the normal physical activities like walking, running but earning. Someone tweeted today that he earned N20,000 by walking for 10 minutes which is possible by downloading an NFT app that tracks your movement and enables you to get paid if you move for a certain time.
“The new ‘move to earn’ innovation has boomed and is now worth a $1 billion market cap, which will keep people on their feet about the next move.”
Gozie Onye, a crypto enthusiast, described cryptocurrency as “a very quick way to earn and save money”.
“Any money placed on a stable coin in cryptocurrency is safer than money left in the bank because the coin does not go up and it doesn’t come down. It also offers opportunities to earn more through gaming, staking and play to earn.”
Onye also cited unemployment as a factor pushing Nigerian youths to invest in the crypto market.
“Imagine when you are jobless and have little savings, then a friend introduced you to a platform that is paying, which convinced you after a trial. I don’t think there is another way to liberate you from unemployment and you will be left with no option but to start introducing people to join. This is one more reason why crypto trading is viral in Africa, especially in Nigeria,” he added.
Oluwatosin Ogunjuyigbe, a blockchain expert, said the high inflation rate in the country had contributed to the increased trading in cryptocurrency.
“Nigerians are looking for ways to hedge their money against inflation. Despite the ban, I will say last year was a big year for Nigerian crypto traders because we started having more Nigerians looking for opportunities in the space,” he said.
According to him, more people now prefer to be paid in crypto from Nigeria to avoid using the naira.