The growing popularity of crypto has made it a major financial asset that is a subject of intense interest and speculation in Nigeria. The failing economy and naira have made holding crypto a necessity as a hedge against inflation. This has led to Nigeria, with its 200+ million residents, attaining the position as the biggest Bitcoin market in Africa.
Less than a few years ago, it used to be very challenging to purchase crypto in Nigeria, but this has changed in recent years. There are now many crypto exchanges that support crypto services for Nigerian users, with some having a localized presence.
Despite the growing attention, crypto adoption has not yet gone mainstream in the country, and many African citizens don’t know where to buy cryptocurrencies. We will be reviewing some of the best crypto exchanges where Nigerians can trade cryptocurrencies.
Best Crypto Exchange in Nigeria
Choosing the right crypto exchange can be difficult due to the various competing options available in the market — it can be an information overload. However, it is essential to evaluate the following criteria when making this choice: safety, reputation, liquidity, accessibility and whether your crypto exchange of choice supports options to deposit and withdraw crypto in Nigerian naira (NGN).
There are also a few tips to note before trading on an exchange, and some of these include:
- Invest only what you can afford to lose;
- Expect volatility, as the cryptocurrency market moves with the law of supply and demand, and can be very sensitive to a lack of liquidity or external financial, political and economic pressures;
- When using an exchange, do not forget to activate safety mechanisms like biometric verification and two-factor authentication (2FA);
- If you are a long-term holder of cryptocurrencies, it is advisable to remove your coins from exchanges if you want to claim complete sovereignty over them. There are safe offline wallets that allow you to hold your private keys, providing an extra layer of security. Once you buy crypto assets from an exchange, transfer them to a private wallet, preferably a hardware wallet.
Best Crypto Trading Platforms in Nigeria
In just four years of existence (May 2021), Binance has established itself as the leading exchange in the crypto market. Binance initially launched in China and continues to expand its services globally.
Binance’s success is mainly due to its constant innovations, reduced transaction costs and reliability. The exchange offers easy-to-use features for newbies as well as complex trading tools for professional traders.
Binance passes the criteria in terms of liquidity since it processes more than $1 billion daily in transactions. It also offers over a hundred coins, many trading pairs as well as unique features and services such as staking, DeFi farming and more. What makes Binance unique for Nigerians is that it has a localized presence in Nigeria.
Nigeria users can access naira (NGN) trading pairs, and at the moment, the exchange supports two NGN trading pairs, BTC/NGN and USDT/NGN. In February 2021, Binance added the NGN FIAT/NBN trading pair to its P2P trading platform in Nigeria as well.
The exchange also previously allowed direct deposits and withdrawals from Naira debit cards, but this option was suspended due to the Central Bank of Nigeria (CBN) directive that mandated financial organizations to cease processing payments for crypto exchanges.
To circumvent this regulatory problem, Binance developed a P2P platform that provides a safe environment for buyers and sellers to transact at zero transaction fees. Nigerians can also access extensive crypto products, including decentralized finance (DeFi). Users can stake liquidity tokens to earn interests regardless of market fluctuations. There are other features, including savings, launchpool and vaults on the Binance platform.
Binance also offers Android and iOS devices mobile apps, with the apps offering an optimized trading experience. Traders can further use robust tools provided on the app and trade spot, margin and futures markets on the go.
Coinbase has emerged as a popular crypto exchange in recent years. It became the first crypto-based company to launch an IPO listing on the Nasdaq exchange in 2021. The platform serves as a broker bringing buyers and sellers in a single platform.
As of May 2021, Nigeria is not one of the 13 African countries supported by Coinbase.
Coinbase is noted for its user-friendly interface and is a great option for beginners just getting to know cryptocurrencies.
The platform is also one of the safest and uses a strict selective process before listing crypto assets on its exchange. At the moment (May 2021), users in supported countries can buy, sell or trade over 30 cryptocurrencies on Coinbase.
Coinbase, when compared to Binance, lacks a presence in Nigeria. This means that as of May 2021, Nigerians cannot register for Coinbase and there are no naira (NGN) trading pairs or P2P platforms for Nigerians to exchange naira for cryptocurrencies. It should also be noted that transaction fees on Coinbase are significantly higher than Binance.
Nonetheless, the mobile app is regarded as one of the best, and Coinbase has a dedicated wallet app that provides safe custody of assets. Coinbase is recommended for a trader or holder that values security over extensive crypto options — but for now, Nigeria must wait for if/when Coinbase adds the country to its supported areas.
For those that really want to use a limited version of Coinbase, the Coinbase app will allow Nigerian users to make wallet transfers and make use of the Coinbase Vault offering.
Luno has emerged in the past few years as one of the biggest crypto platforms in Africa, with a significant market share in Nigeria. Launched in 2013, Luno has expanded to several countries and has its headquarters in London, UK.
Luno allows Nigerians to buy cryptocurrencies directly from naira-domiciled cards and domestic transfers. Also, the exchange has Naira trading pairs where users can convert their crypto to fiat and withdraw to their accounts. However, this service has been affected by the CBN ban that was imposed in February 2021.
Apart from trading fiat and the USDC stablecoin, Luno supports popular coins like Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash. Luno has been able to achieve success due to its mobile app that can be downloaded by old mobile phones and new devices.
The app is user-friendly and intuitive, allowing users to get an optimized trading experience. The app is equipped with trading tools, including a price analytical dashboard, charts, indicators and many more.
Among the three exchanges reviewed, as the only pure fiat-to-crypto exchange, Luno has the highest transaction fees, which is a major disadvantage for users. It also has limited trading options for users, which makes it unsuitable for day traders.
However, these limitations are negligible considering the convenience and ease of buying crypto in Nigeria using Luno. The exchange platform continues to innovate in the face of growing regulations and is set to become a significant stakeholder in the Nigerian crypto industry.
While crypto exchanges are continuously getting headwinds from Nigerian regulators fearful of the economic, financial and political impact and instability they may bring, the surging popularity of digital assets in the country augur well for the future of exchanges in Africa’s most populous nation.
When using digital asset exchanges in Nigeria, it’s probably the safest choice to deal with established global trading platforms where you know that every aspect — from support, security, liquidity to compliance — has been thoroughly reviewed and satisfactorily attended to in accordance with international standards.