A Survey of Attitudes, Behaviors, and Experiences of Nigerian Investors in Cryptocurrencies

Abstract

Purpose

This study explores the awareness, attitudes, risk tolerance, experiences, motivations, and financial literacy levels of Nigerian investors in the cryptocurrency ecosystem.

Design/Methodology/Approach

A self-administered questionnaire, validated by the OECD and previously used in Malaysia, the Philippines, and Vietnam (2019), was adapted for Nigeria. Data were tabulated and analyzed.

Findings

Key results reveal:

• Respondents were predominantly young, male, and risk-averse.
• Many falsely believed global markets were riskier than national markets.
• Primary motivations for crypto investment included fear of missing out (FOMO) and entertainment.
• Social media, informal discussions, and online articles were major information sources.
• Investments were funded via savings, monthly budgets, or loans from family/friends.

Originality/Value

This is the most comprehensive study on Nigerian crypto investors, enabling comparisons with Asian markets using the OECD instrument.

Keywords

• Cryptocurrency
• Digital currency
• Nigeria
• Bitcoin
• Cryptoassets
• Blockchain

Introduction

Nigeria’s crypto adoption surged post-2016, fueled by economic instability, inflation, and distrust in traditional finance. Despite government restrictions, peer-to-peer (P2P) trading thrives, making Nigeria the second-largest Bitcoin P2P market globally.

Key Drivers:

• Economic Factors: High inflation (57% poverty rate), currency depreciation, and limited access to banking.
• Technological Savvy: Youth-dominated, tech-savvy population embracing digital assets.
• Remittances: Cryptos circumvent strict cross-border payment regulations.

Crypto Regulation in Nigeria

Timeline:

• 2017: Initial tolerance; blockchain research committees formed.
• 2021: CBN banned crypto transactions via banks, citing volatility and illicit risks.
• 2023: National Blockchain Policy approved to foster transparency and innovation.

Challenges:

• Overlapping mandates between CBN (currency oversight) and SEC (investment regulation).
• Persistent P2P trading despite bans, highlighting regulatory inefficacy.

Research Design

Methodology:

• Survey Instrument: OECD questionnaire adapted for Nigeria (2022).
• Data Collection: Administered via crypto platforms, WhatsApp, and online channels.
• Sample: 636 respondents, mostly from Lagos (55.5%).

Results and Discussions

Demographics:

• Age: 58% aged 18–35.
• Education: 69.4% undergraduates; 21.7% postgraduates.

Awareness and Ownership:

• 93.9% knew of Bitcoin/Ethereum; 61% currently hold crypto.
• 61% bought crypto via online platforms (e.g., Binance).

Financial Literacy:

• 82.6% understood high-return investments entail high risk.
• 45% falsely believed global markets were riskier than local ones.

Investment Motivations:

• 31.6% sought to learn about crypto.
• 23% aimed for quick profits; 28.3% viewed it as long-term investment.

Risk Appetite:

• 64.8% could not afford to lose their crypto investments.
• 37% were "slightly worried" about price drops.

Conclusions and Recommendations

Key Insights:

• Nigerian crypto investors are young, digitally savvy, but financially undereducated.
• Social media drives investment decisions, often leading to uninformed risks.

Recommendations:

1. Regulatory Clarity: Harmonize CBN and SEC policies to protect investors.
2. Financial Education: Launch campaigns to improve crypto literacy.
3. Infrastructure: Enhance tech frameworks to support secure trading.

👉 Explore secure crypto trading platforms

FAQs

1. Why is crypto popular in Nigeria?

Cryptos offer an alternative to unstable traditional finance, enabling remittances and hedging against inflation.

2. How do Nigerians buy cryptocurrencies?

Primarily via P2P platforms like Binance, funded through savings or loans.

3. What risks do Nigerian crypto investors face?

Price volatility, scams, and lack of regulatory protection.

👉 Learn how to invest safely in crypto

References

Ayadi, O.F., et al. (2024). Journal of Internet and Digital Economics, 4(2), 83–98. DOI: 10.1108/JIDE-11-2023-0023.
Additional citations per original text.

Further Reading

• OECD (2019). Cryptoassets in Asia.
• Ukwueze, F.O. (2021). PER/PELJ, 24, 1–38.

Acknowledgements

Research conducted in collaboration with the University of Lagos, Nigeria.

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