How to Trade Cryptocurrency in Nigeria Legally and Make a Profit

Cryptocurrency has revolutionized the financial world, providing individuals with a decentralized and borderless form of digital currency.

In Nigeria, the interest in cryptocurrency has grown significantly, with many individuals seeking to explore the opportunities it presents.

If you’re interested in venturing into the world of cryptocurrency trading in Nigeria, we will walk you through the process, ensuring you have the necessary knowledge to get started.

In this comprehensive guide, we will walk you through the process of trading cryptocurrency in Nigeria, from setting up your accounts to executing trades and managing your investments.

So, let’s dive right in and explore the steps involved in trading cryptocurrency in Nigeria.

Understanding Cryptocurrency Trading

Before delving into the intricacies of how to trade cryptocurrency in Nigeria, it’s crucial to have a solid understanding of what cryptocurrency trading is and how it works.

Cryptocurrency trading involves buying and selling digital assets with the goal of making a profit. Unlike traditional stock markets, cryptocurrency markets operate 24/7, allowing traders to engage at any time.

Cryptocurrencies are digital or virtual currencies that utilize cryptography for security. They operate on decentralized networks called blockchains, which ensure transparency, immutability, and security.

Cryptocurrencies offer various use cases, including peer-to-peer transactions, decentralized finance (DeFi), non-fungible tokens (NFTs), and more.

Bitcoin, Ethereum, and Ripple are some of the well-known cryptocurrencies, but there are thousands of others with unique features and purposes.

Is Cryptocurrency Legal in Nigeria?

Cryptocurrency regulation in Nigeria has evolved over time. Initially, there was no specific legislation addressing cryptocurrencies, leading to a lack of clarity on their legal status.

However, the situation changed in 2017 when the Central Bank of Nigeria (CBN) issued a circular highlighting the risks associated with cryptocurrencies and warning financial institutions against dealing with them.

This CBN circular indeed had a significant impact on cryptocurrency exchanges operating in Nigeria.

However, in September 2020, the SEC released a statement classifying cryptocurrencies as securities and stating that they would be regulated under existing securities laws.

This move indicated a shift toward a more comprehensive regulatory framework for cryptocurrencies in Nigeria.

For instance, it is no longer possible to buy and sell cryptocurrencies using a debit or credit card. Peer-to-peer (P2P) exchanges are now used by cryptocurrency traders in Nigeria to trade Bitcoin and other cryptocurrencies.

For example, on TransferXO, you trade their cash for your cryptocurrency, and in exchange, they offer you the cryptocurrency equivalent in exchange for their cash.

Generally, you must sign up for a legitimate peer-to-peer cryptocurrency exchange that permits trading in cryptocurrencies if you want to avoid trading cryptocurrencies illegally.

Can I Trade Cryptocurrency in Nigeria Legitimately?

Choosing a reliable cryptocurrency exchange platform is the first step to take when you want to trade crypto legally in Nigeria.

Selecting a reliable cryptocurrency exchange is paramount to ensure a safe and seamless trading experience.

A platform like TransferXO is one exchange that is certainly legal in Nigeria.

You only need a cryptocurrency wallet and an exchange to start trading cryptocurrencies. You can register on the TransferXO App as a novice and find introductory cryptocurrency training at the TransferXO Academy.

With the restriction in place, we’ll advise you to go for platforms that prioritize security, such as two-factor authentication, cold storage for funds, and regular security audits.

How to Trade Cryptocurrency in Nigeria

Trading cryptocurrency in Nigeria is an exciting opportunity that requires careful planning and execution.

TransferXO is a popular digital wallet and cryptocurrency exchange platform that allows users to store, send, and receive various cryptocurrencies.

If you’re looking for the best trading platform in Nigeria, TransferXO is the easiest platform that can teach you how to trade cryptocurrency.

To get started, follow these steps:

Step 1: Open an Account with a Legal Crypto Exchange (TransferXO)

To start trading cryptocurrency in Nigeria, you need to open an account with a reputable cryptocurrency exchange.

TransferXO allows you to trade Bitcoin, USDT, and other cryptocurrencies at the best rates. The platform offers a zero fee for P2P transactions.

Follow these steps to start trading cryptocurrency in Nigeria:

1. STEP 1: Click on the “Get Started” button to start the account creation process.
2. STEP 2: Click on “Sign up now” if you are not a registered user. Fill out the necessary information, including your email address, password, and any other requested details.
3. STEP 3: Once you’ve completed the form, you will receive a confirmation email. Use the verification code in this email to verify your account.
4. STEP 4: After your account is verified, sign in to your account and familiarize yourself with the user interface. As a first-time user,  you will see hints and quick tips upon logging in. 

Step 2: Verify Your Identity

Most reputable cryptocurrency exchanges require users to complete a Know Your Customer (KYC) process to comply with regulations and prevent fraud.

TransferXO will make you go through KYC unlike some crypto exchanges out there without KYC verification.

In order to comply with regulatory regulations, the KYC (Know Your Customer) process on TransferXO requires you to provide a number of identification and verification papers.

When you create your account, you would be furnished with a Tier 1 account, which requires a working phone number.

Detailed instructions on how to complete phone verification and comprehend the Tier 1 limits (purchase, daily deposit, monthly deposit, withdrawal) are on the TransferXO FAQ section.

The verification process typically involves the following steps:

• TIER 1 Verification: Phone Number Verification
• Tier 2 Verification: Government ID Verification
• Tier 3 Verification: Completion of Tier 2 Verification

You can now successfully Sign up for on TransferXO Account to start trading legally.

Step 3: Securing Your Wallet and Funds

To begin your cryptocurrency trading journey, you first need to set up a cryptocurrency wallet.

A cryptocurrency wallet is a digital wallet that allows you to securely store, send, and receive your digital assets.

However, the security of your cryptocurrency holdings on TransferXO is paramount.

Implement these measures to secure your wallet and funds:

Creating a Strong Password: A strong password is the first line of defense for your TransferXO account. We’ll advise you to use a minimum of 12 characters or more. Include uppercase and lowercase letters, numbers, and special characters. Above all, ensure your TransferXO password is unique and not used for any other accounts.

Enabling Two-Factor Authentication: Two-factor authentication (2FA) provides an additional layer of security to your TransferXO account. By enabling 2FA, you add an extra step to the login process, requiring both your password and a secondary authentication method to access your funds.

Step 4: Choosing A Crypto Trading Strategy on TransferXO

TransferXO is a leading cryptocurrency exchange platform that provides a wide range of trading options for both beginners and seasoned traders.

By understanding various strategies and their implications, you’ll be better equipped to make informed decisions and maximize your trading success.

Successful cryptocurrency trading often relies on employing effective trading strategies. Here are some popular strategies you can employ on TransferXO:

1. Day Trading: Day traders aim to profit from short-term price fluctuations within a single day. They execute multiple trades and close all positions before the market closes.
2. Swing Trading: Swing traders hold positions for a few days to several weeks, capitalizing on medium-term price movements. They aim to capture larger price swings within the overall market trend.
3. Scalping: Scalpers aim to profit from small price differentials by executing numerous trades within a short timeframe. They rely on high liquidity and tight spreads to generate profits.
4. HODLing: HODLing refers to holding onto cryptocurrencies for the long term, regardless of short-term market fluctuations. This strategy relies on the belief that the cryptocurrency’s value will increase over time.
5. Arbitrage: Arbitrage involves taking advantage of price differences between different exchanges or markets. Traders buy low on one exchange and sell high on another, profiting from the price discrepancy.

Step 5: Funding Your Account

After setting up your cryptocurrency exchange account, it’s time to fund it. If you want to trade with ease in Nigeria, here’s how you can deposit funds into your TransferXO account:

1. Debit Cards: TransferXO supports debit cards as their payment method. Some other exchanges accept credit or debit card payments. Enter your card details as requested, and follow the instructions to complete the payment.
2. Fiat Wallet: If you already own cryptocurrencies, you can deposit them into your exchange wallet by sending them to the provided deposit address. Ensure you’re sending the correct cryptocurrency to the corresponding address.
3. Bank Transfer: Many exchanges support bank transfers as a funding method. Follow the instructions provided by the exchange to initiate a bank transfer from your account to the exchange’s bank account.

Step 6: Placing Your First Trade

Once your account is funded, you’re ready to start trading cryptocurrency on TransferXO. Follow these steps to place your first trade:

1. Choose the Cryptocurrency Pair: Select the cryptocurrency pair you wish to trade. For example, Bitcoin (BTC)/Ethereum (ETH) or Ripple (XRP)/Litecoin (LTC).
2. Select the Order Type: Decide whether you want to place a market order or a limit order. A market order will execute at the current market price, while a limit order allows you to specify the price at which you want to buy or sell.
3. Enter the Trade Details: Input the amount you want to buy or sell and review the trade details carefully.
4. Confirm the Trade: Double-check the trade details and click on the “Confirm” button to execute the trade.
5. Monitor Your Trade: Keep an eye on the market to track the progress of your trade. You can set alerts or notifications to stay updated on price movements.

Step 7: Monitoring and Managing Your Trades

To become a successful cryptocurrency trader, it’s essential to monitor and manage your trades effectively. Here are some tips:

1. Stay Informed: Keep yourself updated with the latest news, market trends, and events that may impact cryptocurrency prices. Follow reputable sources and utilize cryptocurrency tracking tools to monitor prices and market sentiment.
2. Set Realistic Goals: Establish realistic expectations and goals for your trading journey. Cryptocurrency markets can be volatile, so it’s important to manage your risk and avoid making impulsive decisions.
3. Analyze Market Trends: Use technical analysis tools and indicators to identify patterns and trends in the market. This analysis can help you make informed trading decisions.
4. Manage Risk: Implement risk management strategies, such as setting stop-loss and take-profit levels. These tools automatically execute trades when predetermined price levels are reached, limiting potential losses and securing profits.
5. Review and Adjust Your Strategy: Regularly evaluate your trading strategy and make adjustments as needed. Learn from your successes and failures, and refine your approach to improve your trading performance over time.

The Best Platforms for Trading Cryptocurrency in Nigeria

Selecting a reliable cryptocurrency exchange is paramount to ensure a smooth trading experience.

With numerous exchanges available, it’s essential to consider factors such as security, liquidity, fees, user interface, and customer support.

TransferXO

The top P2P cryptocurrency exchange platform in Nigeria, TransferXO, performs nearly the same functions as Paxful with more capabilities. It is arguably the best of all time. It’s also one of the top trading platforms in Nigeria, so we can state that.

With several cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and a wide variety of other altcoins, the site is recognized for its low fees during crypto trading.

TransferXO charges a maker fee of 0.75% and a taker cost of 0%, both of which are quite reasonable fees. Additionally, there are no fees for deposits or withdrawals and no volume-based pricing. The minimal transaction amount is 0.001 Bitcoin, and over 100,000 people are currently using blockchain wallets.

Anyone interested in buying and selling cryptocurrencies quickly, securely, and reasonably should go straight for TransferXO. Due to its low fees, extensive range of cryptocurrencies, and ease of use, it is an excellent choice for both expert and novice cryptocurrency traders.

TransferXO distinguishes out thanks to the exceptional P2P bitcoin trading options outlined below.

P2P Trading

At TransferXO, you can buy, sell, and exchange a variety of cryptocurrencies safely, easily, and swiftly. By choosing TransferXO, you have access to numerous exchanges, no restrictions, and various coins with incredibly low transaction fees.

Bill Payment

You may easily pay bills with your digital assets using TransferXO’s user-friendly bill payment service, taking advantage of rapid and reasonably priced transactions. Connect your wallet to your phone to pay as you go.

Other popular cryptocurrency exchanges include:

• Binance
• Paxful
• Quidax
• NairaEx
• Coinbase

Researching and comparing these exchanges based on your requirements and preferences will help you find the most suitable platform for your trading needs.

Can I Make Profit Trading Cryptocurrency in Nigeria?

Yes, it is possible to make a profit trading cryptocurrency in Nigeria. However, it requires a combination of market knowledge, analysis, risk management, and emotional discipline.

However, to mitigate risk in cryptocurrency trading, diversification is key. Spreading investments across different cryptocurrencies helps reduce exposure to the volatility of a single asset.

On TransferXO, you can decide to buy and Hodl, then sell off when the market is high, that is a certain way of making profits without risk.

Or you can kill the fear and take a leap to involve in day trading and other strategies on the platform.

Meanwhile, it’s crucial to approach cryptocurrency trading as a long-term endeavor and not expect overnight riches.

Additionally, implementing stop-loss orders, setting profit targets, and using risk management tools can help minimize potential losses.

However, cryptocurrency profits are subject to taxation in Nigeria. The Federal Inland Revenue Service (FIRS) considers cryptocurrencies as taxable assets.

It’s important to consult with a tax professional or accountant to ensure compliance with tax regulations and fulfill reporting requirements.

Tips and Best Practices for Trading Cryptocurrency on TransferXO

To enhance your trading experience on TransferXO, consider the following tips and best practices:

1. Educate Yourself: Continuously educate yourself about cryptocurrencies, blockchain technology, and trading strategies to make informed decisions. With TransferXO Academy, you can be certain to get the right education you need to understand the best way to trade cryptocurrency in Nigeria.
2. Start with Small Investments: If you’re new to trading, start with small investments to understand the market dynamics and minimize potential risks.
3. Set Realistic Goals: Set realistic goals and avoid succumbing to FOMO (Fear of Missing Out) or making impulsive decisions based on short-term market movements.
4. Practice Risk Management: Use stop-loss orders, diversify your portfolio, and never invest more than you can afford to lose.
5. Keep Learning: Stay updated with the latest trends, news, and developments in the cryptocurrency market to adapt your trading strategies accordingly.
6. Seek Professional Advice: If needed, consult with a financial advisor or seek guidance from experienced traders to gain insights and improve your trading skills.

FAQs

Here are some frequently asked questions about trading cryptocurrency and making a profit in Nigeria:

Conclusion

Trading cryptocurrency in Nigeria can be a rewarding endeavor if approached with caution and the right strategies.

Educate yourself about the intricacies of the market, choose a reliable exchange, and develop a well-defined trading plan.

Stay updated with market news, manage risks effectively, and never invest more than you can afford to lose.

By following these guidelines, you can increase your chances of trading cryptocurrency and making a profit in Nigeria.