Nigeria is a story of two extremes when it comes to crypto: The country has one of the highest crypto adoption rates on the planet, but the government has also imposed some of the world’s toughest anti-crypto regulations.
In February, Nigeria banned banks and other licensed financial institutions from handling crypto transactions, and warned of severe sanctions for violations. Hoping to curb demand for other digital tokens, the country also launched its own virtual currency, the eNaira, backed by its central bank.
The West African nation views the crypto ban as necessary to protect the Nigerian financial system, as well as to limit its use for cybercrime, money laundering and terrorism financing. But so far the country’s efforts have done nothing to dampen the enthusiasm for crypto among Nigerian youth.
The country saw 210.6% growth in crypto users aged 18 to 24 in early 2020, and that number is expected to only have increased further. Nigeria is second in the world only to the U.S. in bitcoin trading, according to marketplace Paxful. According to Statista, Nigeria has the highest per capita rate of crypto ownership in the world, at 31.9%. (Those numbers also likely underrepresent the true level of crypto ownership, given that transactions are anonymous.)
So what is driving the popularity? In chats with three young Nigerian crypto traders, we learned what got them hooked on crypto, how they stay successful and whether the ban has had any effect whatsoever on the market.
Prince Uchechukwu - Doctor
Prince Uchechukwu is a 30-year old medical doctor whose crypto journey started in earnest when a colleague he shared an apartment with randomly asked if he had heard of Bitcoin and Ethereum.
“Then, I had heard of it and had actually used it for a while, but I didn't really know what it was,” Uchechukwu told us.
“He told me they gave him coins worth 300,000 ($750), and I was awed,” Uchechukwu recalls. “I decided to take more interest in cryptocurrency. I bought some at the spot.”
From there, he set out to become great at trading, and Uchechukwu says he learned consistency was key. He achieved this by doing lots of research, following traders on Twitter, finding out trading options, learning fundamental analysis and putting YouTube to great use.
He started out his trades with Bitcoin and Ethereum, the popular coins his friend first brought to his attention. Bitcoin is the most powerful in the market, possessing almost 50% of the entire market cap, and Uchechukwu says he originally traded the coin, oblivious to the fact that the market occasionally dipped.
The token that made him the biggest profit though, was Axie Infinity, which he discovered when a friend on Twitter introduced him to the concept of gaming and earning with it.
Uchechukwu says he now trades a ton of different coins, from Luna to Avast to Alice and 15 others.
Though he admits to having had both wins and losses along the way, Uchechukwu says crypto trading has led to a boost in his net worth and reaching goals he never thought he would. Currently, his monthly income varies widely by how much he invests.
“There are lessons you learn over time with practice,” he says.
For him, the rise of crypto makes sense given the current economic situation in Nigeria.
“People are suffering. They want to make money and are always seeking various productive means of income and one of the fundamentals of Bitcoin especially, is curbing inflation,” Uchechukwu says. “The Central Bank keeps printing naira notes and when the supply outweighs the demand, the currency starts losing value.”
“When you get some of this cryptocurrency which appreciates in value and sell them, you'll make profits.”
Still, Uchechukwu thinks that a crypto market crash may be inevitable. But, if it does happen, Uchechukwu says he won’t feel bad because it will rise again. Through his trading, he has learned that the market runs in cycles.
The ban has had a number of effects on Uchechukwu. Withdrawing from wallets into bank accounts used to be easily accessible, but since the enforcement of the circular, traders like him have had to fall back on third party means, leaving them vulnerable to getting swindled. He thinks that the ban has discouraged a number of folks from trading as navigating the processes of withdrawing and depositing money put them off.
Zeal Ikechukwu - Political scientist
Entrepreneur and political scientist, Zeal Ikechukwu, runs a men’s clothing line in Nigeria. He says he began trading crypto after facing mistreatment at a former job.
Ikechukwu is a practicing Christian, and for him, there'll always be a God side to his story. He finished active service to his country in 2019 and got a job, but the experience was not a good one. From there, he found himself investing in Ponzi schemes, though he did manage to profit from them before they failed. Then he started making small crypto trades, but he wasn’t versed enough to make big moves. Fortunately for Ikechukwu, he was able to connect with church brothers who were already immersed in the crypto trade to learn more.
He made his first million from crypto trading around September 2020, when one of the biggest crypto airdrops hit the market. He qualified for the free Uniswap Airdrop with the HEX Smart Contract as he had previously purchased HEX, and he was able to transact on Uniswap.
Ikechukwu says that he wouldn't have been able to reach his current net worth at his past job. Now, his weekly income revolves around how much capital he invests, though he declined to name a figure.
“At every point your income in crypto is mostly based on your capital,” he says. “If a person trades with $10,000 and makes 10% of his capital every week, he makes $1,000. It's how it works with me.”
Ikechukwu says constantly seeking knowledge has kept him afloat in the trading space, and he has developed a routine of staying up late to watch videos, buying crypto e-books, joining numerous crypto groups and following the teachings of anyone he considers a pro.
Unlike Uchechukwu, he doesn’t anticipate a crypto market crash. In contrast to the many Ponzi schemes he invested in, Ikechukwu believes the crypto market holds as much strength as Forex Trading and the Foreign Exchange system which has long existed. Still, Ikechukwu noted that there are scam projects where promising coins vanish from the market after being purchased, and said some traders consider that synonymous to a crash.
This doesn’t mean all his trades have been successful. When Shitcoins hit the market, he traded and initially profited from them, but in the end, he incurred as much loss as profit.
“I think the biggest issue I have had in crypto is the Shitcoins era,” Ikechukwu said. “I trade Shitcoins now, but with a whole lot of carefulness. Shitcoins do not have use cases, now we go for useful coins”.
As for the ban, Ikechukwu believes that the government only enhanced cybercrime and exposed its citizens to fraudulent campaigns. For example, he says an intermediary platform between buyers and sellers in the Nigerian crypto space known as The Ex-Crew tended to defraud traders, and that he himself once fell for its gimmicks.
When we asked Ikechukwu for his thoughts on why crypto remains popular despite the ban, he said the untraceable and decentralized nature of blockchain plays a big role, as it fends off third-party interference and supports independence from the government. He emphasized the thrill of being independent from bank policies and carrying out transactions through systems that cannot be unearthed.
Also, he believes that the volatility of the market intrigues Nigerians. The fact that all a person needs to do is understand how to move around the tide and study the market to wake up a legitimate millionaire contributed to its rapid adoption.
“As it is very easy and can be done at the convenience of your home by just studying your chart and trades, I think the Nigerian youth, despite the ban, find solace in trading cryptocurrencies,” Ikechukwu says.
Perpetual Ifeoma Chukwuma - Senior Analyst
As far back as 2014, Perpetual Ifeoma Chukwuma, a 26 year-old business administration graduate, had already picked up on the growing hype around cryptocurrencies. She began trading in 2015, but she only developed a serious interest in 2017, when her friends began to profit from it.
To get better at her new interest, Chukwuma joined tons of groups on Telegram and on Whatsapp, and signed up for online lectures. Reading charts, running analysis, and understanding the market were particularly important for her.
She found a trade partner, a friend who she took on the trading stages and processes with, and starting with the basics, they did great at minimizing their losses before they moved on to the more complex aspects of crypto trading like farming and staking.
Chukwuma started off with trading Ethereum and sold off pretty early. She traded with Solana, BNB, Dot, Uniswap, Ocean, Rose and has made her largest profits from KLV. She told us she still trades these coins because they're actual projects and the market keeps going.
As she kept investing, she started making up to 10 and 20 times her investment in single trades, and her net worth skyrocketed. The highest trade she has made to date was 70 times her investment – and that was on Shitcoins.
“In the market, we're always greedy. We never stop,” she says.
“There are some losses – you have your wins and your losses. You win some, you lose some,” she says. “But if you just know your basic trading guidelines, if you stick to them, then your losses will be minimal.”
Depositing and withdrawing used to be easy with her Nigerian bank account, but the ban put a stop to this. Now, Instead of making direct deposits with bank accounts, she has taken to trading with P2P platforms, as they were unaffected by the ban.
Chukwuma thinks crypto is still growing in Nigeria because people are starting to open up to the buzz and finally getting attentive to the gains in the crypto market. She believes that the pandemic, as well as the varying trading options crypto opens to people helped propel the surge.
“There are so many ways you can make money in crypto,” she says. “If you are not sport trading, if you are not scalping, if you're not trading futures, you are either staking somewhere to earn more, to earn passive income, or you're farming somewhere.”
Finally, she highlighted the resilience of young people in Nigeria pushing past boundaries set to hold them back as a factor in crypto trading’s rise.
Chukwuma asserts that traders and crypto enthusiasts can use social media as a tool and that every piece of information necessary to learn and earn is available somewhere on the internet. Despite the volatility of the market, she doesn’t foresee a crash on the horizon.
She believes crypto is here to stay unless “something huge and unimaginable that no one sees coming happens.”