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 duo of Geo-Fluids Plc and Afriland Properties Plc propelled the NASD Over-the-Counter (OTC) Securities Exchange up 0.13 per cent on Friday, January 10.
Investors gained N1.4 billion during the trading session after the market capitalisation of the bourse ended at N1.053 trillion compared with the previous day’s N1.052 trillion, and the NASD Unlisted Security Index (NSI) increased at the close of business by 4.07 points to wrap the session at 3,073.93 points compared with 3,069.86 points recorded at the previous session.
Geo-Fluids added 25 Kobo to its value to close at N4.85 per unit compared with the previous session’s N4.60 per unit, and Afriland Properties Plc gained 24 Kobo to close at N16.25 per share versus Thursday’s closing price of N16.01 per share.
There was a 35.4 per cent fall in the volume of securities traded in the session as investors exchanged 4.3 million units compared to 6.6 million units traded in the preceding session, the value of shares traded yesterday went down by 37.4 per cent to N17.2 million from the N27.5 million recorded a day earlier, and the number of deals decreased by 47.2 per cent to 19 deals from the 36 deals recorded in the preceding day.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and Industrial and General Insurance (IGI )Plc with 10.7 million units sold for N2.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira witnessed a depreciation on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 10.
According to data from the FMDQ Exchange, the local currency weakened against the greenback yesterday by 0.12 per cent or N1.80 to sell for N1,543.03/$1 compared with the preceding day’s N1,541.23/$1.
The pressure on the domestic currency came as the access granted to the Bureaux de Change (BDC) operators by the Central Bank of Nigeria (CBN) to purchase FX from the official market through the Electronic Foreign Exchange Matching System (EFEMS) platform prepares to end next week, precisely on January 19.
The CBN had given a 42-day window to the operators to access the platform to help stabilise the Naira in December, and this expires next week.
On Friday, the Nigerian currency tumbled against the Pound Sterling in the official market by N30.78 to sell for N1,889.29/£1 compared with the previous day’s N1,858.51/£1, but gained N5.48 against the Euro to finish at N1,583.81/€1, in contrast to Thursday’s rate of N1,589.29/€1.
As for the parallel market, the Nigerian Naira remained stable against the US Dollar during the trading session at N1,650/$1, according to data obtained by Business Post.
In the cryptocurrency market, it was bearish as the US economy added 256,000 jobs last month, the Bureau of Labor Statistics reported on Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from an originally reported 227,000).
However, the readings came after a number of recent economic reports triggered a broad-market pullback across asset classes such as crypto as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.
Cardano (ADA) fell by 3.6 per cent to trade at $0.921, Solana (SOL) slumped by 2.8 per cent to $185.93, Ethereum (ETH) depreciated by 1.4 per cent to $3,233.27, Litecoin (LTC) lost 1.3 per cent to finish at $103.62, Dogecoin (DOGE) shed 0.5 per cent to sell at $0.3315, Bitcoin (BTC), waned by 0.2 per cent to $94,154.43, and Binance Coin (BNB) went south by 0.1 per cent to $693.30.
On the flip side, Ripple (XRP) jumped by 1.5 per cent to settle at $2.34, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Dipo Olowookere
Profit-takers took control of Customs Street on Friday, plunging it by 0.08 per cent at the close of trading activities.
The sell-offs were across all the key sectors of the Nigerian Exchange (NGX) Limited on last trading session of the week.
The insurance space went down by 1.53 per cent, the banking index depreciated by 0.41 per cent, the consumer goods sector weakened by 0.16 per cent, and the energy counter slumped by 0.08 per cent, while the industrial goods sector closed flat.
At the close of business, the All-Share Index (ASI) tumbled by 79.68 points to 105,451.06 points from 105,530.74 points and the market capitalisation retreated by N48 billion to N64.303 trillion from N64.351 trillion.
Yesterday, investors traded 1.5 billion shares worth N19.4 billion in 12,877 deals compared with the 489.5 million shares worth N13.1 billion transacted in 13,010 deals in the preceding day, indicating a decline in the number of deals by 1.02 deals and a rise in the trading volume and value by 203.14 per cent and 48.09 per cent, respectively.
Wema Bank was the busiest stock with 976.2 million units valued at N9.8 billion, Tantalizers traded 53.0 million units worth 129.6 million, Universal Insurance sold 34.8 million units for N26.8 million, Access Holdings exchanged 33.9 million units valued at N843.8 million, and Nigerian Breweries traded 27.3 million units worth N873.3 million.
The heaviest loss was suffered by Sunu Assurances with a decline of 9.99 per cent to trade at N7.30, Eunisell shed 9.96 per cent to N17.35, SAHCO crumbled by 9.87 per cent to N30.15, DAAR Communications plunged by 9.28 per cent to 88 Kobo, and Sovereign Trust Insurance went down by 7.04 per cent to N1.32.
On the flip side, C&I Leasing gained 10.00 per cent to close at N4.51, Honeywell Flour appreciated by 9.99 per cent to N10.02, Trans Nationwide Express jumped by 9.89 per cent to N2.00, RT Briscoe rose by 9.83 per cent to N2.57, and Secure Electronic Technology grew by 9.46 per cent to 81 Kobo.
Business Post reports that the bourse ended with 33 price gainers and 25 price losers, indicating a positive market breadth index and strong investor sentiment.
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