Are you interested in earning income by buying and selling Bitcoin in Nigeria? If the answer is yes, read on as we discuss how to start Bitcoin trading in Nigeria and also provide you with valuable tips to help you succeed as a Bitcoin trader.
How to start Bitcoin trading in Nigeria will be discussed below:
-
What is Bitcoin?
Bitcoin (BTC) is the first kind of cryptocurrency that was invented by Satoshi Nakamoto in 2008. However, the identity of Satoshi Nakamoto is unidentified, hence no one knows for certain if the inventor of this cryptocurrency is an individual or a group of intellects.
Over the last decade, the use of Bitcoin has evolved and millions of people around the globe now use the pioneer cryptocurrency as a payment option (to those who accept it) or a source of earning income by trading BTC.
-
Steps on How to Start Bitcoin Trading in Nigeria
Now that we’ve explained what Bitcoin trading entails, let’s provide you with a step-by-step guide on how to go over it.
This section will be discussed under the following subheadings:
- Sign up for a cryptocurrency exchange
- Fund your account
- Pick Bitcoin to invest in
- Begin trading Bitcoin
- Store your Bitcoin safely in a digital wallet
-
Step 1: Sign Up for a Cryptocurrency Exchange
Once you have decided you want to begin Bitcoin trading, the first step of the process is to sign up for a Bitcoin-friendly cryptocurrency exchange.
Opening an account on a cryptocurrency exchange is a quick and simple process that requires providing your personal details and fulfilling the Know Your Customer Customer (KYC) requirements.
Here are some examples of crypto exchange platforms that you can sign up for in Nigeria:
- Binance
- Coinbase
- Luno
- Quidax
- Patricia
- HFM
-
Step 2: Fund Your Account
After successful registration on the crypto exchange of your choice, the next line of action is to put money into your account.
Depending on the cryptocurrency exchange platform you signed up for, you may fund your account through any of the following ways:
- Bank deposits
- Peer to peer (P2P)
- Wire transfer
-
Step 3: Pick Bitcoin to Invest In
With your account on your preferred cryptocurrency exchange platform funded, the next thing to do is to select the quantity of Bitcoin that you want to invest in.
Different cryptocurrency exchange platforms have different ways through which users can buy Bitcoin or any other digital currency that they wish to trade further.
Proceed to pay the user who has agreed to sell the quantity of Bitcoin you wish to buy. The amount you pay for the units of Bitcoin you wish to purchase would be the equivalent of the fiat money you are making the payment with.
Upon receipt of your payment, the user with whom you transacted will send you the Bitcoin equivalent to your digital wallet. And with the BTC in your wallet, you can begin trading.
-
Step 4: Begin Trading Bitcoin
With BTC in your wallet, you can begin trading in Bitcoin on your cryptocurrency exchange platform with other users per your chosen trading strategy.
There are several strategies you can apply when trading Bitcoin on a cryptocurrency exchange. These include:
- Day trading
- Swing trading
- Position trading
- Scalping
Each of the above-mentioned Bitcoin trading strategies has its pros and cons. Later on in this article we would discuss each of these strategies and outline their strengths and weaknesses to help you make an informed decision on the strategy you choose to work it.
-
Step 5: Store your Bitcoin Safely in a Digital Wallet
As you begin trading Bitcoin using your preferred cryptocurrency exchange platform, you would need to store your BTC in your digit wallet provided by the exchange.
The digital wallet affords you the chance to access your BTC on your chosen cryptocurrency exchange whenever you wish to trade. But if you plan on holding your BTC for longer, you may need to buy a specific Bitcoin wallet.
-
Bitcoin Trading Strategies, (plus their Pros & Cons)
As earlier mentioned, there are different Bitcoin trading strategies you can use to trade BTC. In this section of this article, we will briefly talk about four of the common trading strategies and list their respective pros and cons.
These BTC trading strategies include:
- BTC day trading
- BTC swing trading
- BTC position trading
- BTC scalping
-
BTC Day Trading
This BTC trading strategy involves entering and exiting positions within the same day. What this means is that you make a profit from BTC’s short-term market movement.
Pros
- Presents an opportunity for a quick profit
- Better risk management
Cons
- Might love money faster
- Very short-term outlook
- Closing a deal within a day is difficult
-
BTC Swing Trading
BTC swing trading involves a trader taking advantage of short-term price patterns to make a profit.
Pros
- Provides an opportunity to make many long-term decisions
- Less stressful than day trading
Cons
- Quite difficult to learn
- Traders need in-depth research to trade using this strategy
-
BTC Position Trading
This trading strategy involves buying and holding Bitcoin for extended periods.
Pros
- Easier to figure out how to trade using this strategy
- Less stressful
- Market movements are easier to predict
Cons
- Profits can only be actualized in the long term
- Holding BTC for a long time can be risky
-
BTC Scalping
Scalping as a BTC trading strategy focuses on short-term market movement that allows a trader to make substantial small but frequent profits on very small price changes.
Pros
- Quick profits at a high win rate
Cons
- Risky
- Require proper skill to make a profit
-
Tips to be Successful in Bitcoin Trading
Here are some tips that can enhance your chances of being successful in BTC trading:
- Do your research before making any trading decision. Keep up to date with every news and any key event that could potentially cause price movements.
- Ignore hype or misleading news
- Build a balanced cryptocurrency portfolio. That is to say, aside from Bitcoin, keep other cryptocurrencies like Ethereum, Dogecoin, BNB, Litecoin, Cardano, and so on.