Could Crypto Trading Be Nigeria’s Economic Messiah?

 Could Crypto Trading Be Nigeria’s Economic Messiah?

Data sources from Google Trends shows that Lagos, Nigeria ranks as the number one city based on the volume of online searches for Bitcoin (BTC). While this data might alarm you if you still think crypto trading is scam, this data most definitely shows a high level of interest among the city’s approximately 21 million people.

What is Cryptocurrency Trading

Cryptocurrency trading is the act of speculating on cryptocurrency price movements via a CFD trading account, or buying and selling crypto coins via an exchange.

CFDs trading are avenues a trader can find useful while speculating on cryptocurrency price movements without taking ownership of the underlying coins. You can go long (‘buy’) if you think a cryptocurrency will rise in value, or short (‘sell’) if you think it will fall.

Both are leveraged products, meaning you only need to put up a small deposit – known as margin – to gain full exposure to the underlying market. Your profit or loss are still calculated according to the full size of your position, so leverage will magnify both profits and losses.

Trading Cryptocurrencies Via An Exchange

When a trader buys cryptocurrencies via an exchange, he purchases the coins themselves and would need to create an exchange account to put up the full value of the asset to open a position and store the cryptocurrency tokens in his wallet until he is ready to sell.

Exchanges bring their own steep learning curve as the trader would need to understand the technology involved and learn how to make sense of the data. Many exchanges also have limits on how much you can deposit, while accounts can be very expensive to maintain.

Important Market Secrets About Crypto Trading

The crypto market has a few set standards that investors should always adhere to minimize loss. Here are some of the things that you should know about cryptocurrency before trading with the new currency.

Virtual Transactions

There are different types of crypto coins in the marketplace. All the variations available rely on the internet for all the necessary transactions to happen. No physical money exchanges hands as with the conventional types of currency. The trader needs to have a wallet online to store and transfer funds. The charges apply to the wallet the trader uses and the type of crypto coins they are trading in. 

 Acquisition

Before trading in any form of cryptocurrency, the trader must understand how to get the coins and the digital wallet. One can choose to mine the coins or buy them from a willing seller. Mining is tedious and maybe close to impossible for beginners in the trade. It takes time to understand the dynamics of mining cryptocurrency, and the setup also costs a fortune. Buying bitcoins or any other form of crypto also comes with a fair share of challenges. Getting a legit vendor for the same is something that a lot of people struggle with

Software

 Artificial intelligence has now made it possible to understand crypto trading by simplifying some of the most challenging tasks. Traders should pay attention to details in order to make the best deals. Seamless navigation, excellent user experience, and security are among the features that one should review before registering in any of the sites present on the internet.

Before buying the crypto coins, one should ensure that they can use them for virtual purchases for businesses in their jurisdiction.

The Future of Nigeria’s Economy with Crypto Trading

Experts believe that Nigerian millennials and Gen Xers between the ages of 18–40 are most interested in crypto. In October 2020, a UsefulTulips report stated that $32.3 million worth of bitcoin was traded in Nigeria.

On Paxful, a leading peer-to-peer bitcoin marketplace, there are more than a million registered accounts from Nigeria, making up 25% of its customer base. In the last five years, the company reported that Nigeria traded 60,215 bitcoins valued at more than $566 million.

With a youthful population, a bubbling tech ecosystem, an unstable currency, and a high remittance activity, Nigeria is only second to the US in the volume of bitcoin traded according to Quartz.

The National Bureau of Statistics (NBS) reports that Nigeria’s unemployment rate rose to above 24 percent in 2018. Cryptocurrencies like Bitcoin could help the unemployed facilitate small-scale international trade which helps with the rate of unemployment in the country and invariably a reduction in crime rates.

Cryptos, when fully adopted, will have a considerable impact on Nigeria, by increasing financial inclusion of individuals and companies. Particularly, by reducing the transaction fees and time, cross-border payments can be improved. This is beneficial for remittance payments, peer-to-peer lending, and international trade.

The Nigerian Deposit Insurance Corporation and the Central Bank of Nigeria have also set up plans to adopt cryptocurrency technology and have several sub-committees working on implementing blockchain into governmental insurance and financial services.

Patsy Nwogu

A writer focused on data journalism, health and data analytics.

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