Economy
Why Cryptocurrency Trading Has Begun to Feature Prominently in the Nigerian Marketplace
Similar to many African nations, Nigeria is currently in the midst of a digital revolution. More individuals have access to the Internet than ever before and as a result, a host of new financial economic opportunities are beginning to present themselves.
Cryptocurrencies are a perfect example of such a paradigm shift and this marketplace has already attracted both novice and senior investors alike. What are some of the primary benefits associated with this sector and might there be any drawbacks to consider? It pays to look at both sides of the proverbial coin in order to better appreciate where the domestic economy may be headed.
The Notion of a Decentralized Trading Platform
Most cryptocurrency traders think that one of the most appealing aspects of this marketplace involves the use of the blockchain in order to access decentralized investment opportunities. Cryptocurrencies are not governed by any type of central bank and therefore, issues such as inflation and interest rate hikes do not play nearly as important of a role.
Nigerians are also keen to become involved thanks to the decidedly anonymous nature of crypto trading. This has become a practical concern due to increased cybersecurity threats on both a national and international stages. Fiat-backed investments are not nearly as anonymous in nature.
A Market that Knows no Geographical Boundaries
Similar to the Forex sector, cryptocurrency trades can be carried out 24 hours a day and seven days a week. This is ideal for individuals who need to accommodate hectic schedules or who might simply wish to trade after hours and at their personal convenience. Online investment platforms likewise provide around-the-clock access; enabling traders to take advantage of the latest movements at a moment’s notice.
Relatively Low Entry-Level Investments
Although institutional cryptocurrency investors often make news headlines for turning massive profits (and losses on occasion), it is important to mention that this very same marketplace is now open to the general public. Nigerians have become more aware of the potential benefits and registering with a qualified digital platform takes only a matter of minutes.
Furthermore, traders will not need to possess a significant bankroll in order to become involved. The fact that companies are now catering to entry-level positions opens up a world of possibilities even for those who are governed by tight finances.
Intuitive Trading Platforms
Speaking of online trading platforms, Nigerians can leverage a host of professional options. Many of these software packages have been engineered with a user-friendly edge so that little prior experience is required. Some are now offering tutorials and lessons on cryptocurrency basics including:
- Fundamental blockchain principles.
- A closer look at altcoins.
- The top cryptocurrencies at the moment.
- The principle of margin and swing trading.
- How to read technical charts.
It is now clear to see that getting in on the proverbial “ground floor” has never been more of a reality.
Possible Drawbacks
A dose of pragmatism is nonetheless required. Losses can and do occur within the cryptocurrency marketplace. Furthermore, these assets are not currently governed by any central body (such as a government coalition or a central bank). This has caused some individuals to question its inherent levels of transparency.
Another possible issue involves those who choose to invest in tokens with a much smaller market capitalization (altcoins generally fall into this category). Sizeable trades can quickly generate a fair amount of volatility; causing both profits and losses to mount within a relatively short period of time.
A final concern is associated with how future governmental regulations may influence the entire cryptocurrency ecosystem. For example, the United States Securities and Exchange Commission (SEC) is currently engaged in a heated debate regarding whether or not cryptocurrencies should be classified as traditional securities. Some investment analysts feel that tighter governmental regulations may cause larger institutional traders to look elsewhere; a scenario that would negatively impact the value of crypto tokens across the boards.
A Bright (Digital) Future
Notwithstanding the possible concerns outlined above, cryptocurrencies are indeed here to stay. They have now begun to attract a new generation of Nigerian investors that are keen to understand how these unique digital tokens function. Although no one is entirely certain what the future may hold, many feel that this sector could soon rival the Forex marketplace in terms of its overall popularity. As always, only time will tell.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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