Nigerian Crypto Startups Pivot Beyond Retail Trading Amidst Margin Compression

As Nigeria’s crypto market matures, local startups are increasingly expanding beyond retail trading to maintain profitability. The shift comes amid heightened competition and compressed margins in the sector.

The Central Bank of Nigeria’s 2021 ban on banks servicing crypto transactions initially drove users to peer-to-peer (P2P) platforms like Binance and Paxful. However, as these global players competed for the same user base, Nigerian startups began offering diversified services such as bill payments and P2P trading.

From 2023 onwards, many operators accelerated their push into stablecoins, B2B payment rails, futures, and other complex financial products to reduce reliance on volatile retail transactions. This trend has become more pronounced recently, with companies like Busha, Roqqu, Dantown, Luno, and Blockchain.com all expanding their offerings.

Some startups have taken a more drastic approach—Yellow Card completely shut down its retail crypto trading business to focus solely on B2B solutions. According to sources, a typical $100 retail transaction generates only $0.30 to $1.40 in gross revenue for these platforms, highlighting the acute pressure on retail margins.

By diversifying into higher-margin services and targeting institutional clients, Nigerian crypto startups aim to build more sustainable businesses that can withstand regulatory changes and market volatility.