Nigeria's crypto market shifts beyond retail trading for survival

Nigerian cryptocurrency startups are expanding beyond their core retail trading businesses as shrinking margins, rising competition and shifting user behavior force firms to diversify revenue streams, according to a report by tech outlet, TechCabal.

Startups in Africa's largest crypto market initially built their models around helping individuals buy and sell digital assets with peer-to-peer (P2P) trading surging after the Central Bank of Nigeria restricted banks from facilitating crypto transactions in 2021.

But intensifying competition from both local platforms and global exchanges has eroded profitability in retail trading pushing companies including Busha, Roqqu, Dantown, Luno and Blockchain.com to broaden their offerings.

Some firms are shifting toward business-focused services or abandoning retail trading altogether. Others are introducing payment-related features such as bill payments and airtime purchases aiming to generate steadier activity that is less dependent on crypto price cycles.

Over-the-counter (OTC) trading desks which cater to high-volume clients and institutions have also emerged as an alternative revenue stream. However, competition in that segment has compressed margins limiting its effectiveness as a profit buffer.

Industry operators say the move toward multiple product lines reflects a broader shift in Nigeria's crypto sector where firms are seeking more predictable income sources in a market still marked by volatility.

The strategy underscores a growing consensus among startups that long-term sustainability will depend on building businesses beyond retail trading even as Nigeria remains one of the largest crypto markets in Africa by volume.