How to Invest in Bitcoin in Kenya [Complete 2024 Guide]

Bitcoin investment in Kenya is gaining momentum as many Kenyans now embrace digital currency. The internet is abuzz with literature on the different ways you can benefit from Bitcoin investment.

In this guide, we are going to show you how to invest in Bitcoin in Kenya and some of the mistakes you should avoid.

Before that, let us make sure that we understand what we will be talking about by going through a quick refresher on what exactly Bitcoin is.

What is Bitcoin?

Bitcoin is a type of cryptocurrency or digital currency that is traded online. It is intangible meaning you cannot withdraw it and use it in a physical form like you would do with the Kenyan notes or shillings.

The digital asset is not regulated by any centralized financial regulators in Kenya such as the Central Bank of Kenya.

Remember that the Kenya Shilling and other traditional or fiat money around the world are regulated and controlled by governments and banks.

Bitcoin is not.

The digital coin is traded and invested in online platforms known as cryptocurrency exchanges. If you want to buy or sell Bitcoin, you need to use an exchange. However, you can still get it directly from the owner using what is known as an address.

The address is basically like your MPESA number or bank account number. In this case, instead of using a third-party institution like M-PESA or a bank, you can receive Bitcoins directly from the owner.

Bitcoin is considered highly volatile in the sense that its value keeps fluctuating against traditional currencies. You can buy and sell it anywhere in the world without using middlemen such as banks.

Here is what this means.

To send or receive regular money (also known as fiat currencies) from a person outside the country, you will need to use a financial service such as PayPal or Western Union. This usually takes several days before the money reflects in the person’s account.

Let’s come even closer home;

If you want to send money to a friend or family member, you use mobile services such as M-PESA or a bank. You can’t send the money directly without them.

But with Bitcoin, you can.

Bitcoin can be sent instantly and directly to an individual without using third-party services like Western Union, PayPal, or a bank.

It only takes about 10 minutes and the person receives their Bitcoin.

Due to its highly volatile nature, Bitcoin is not recognized by the Central Bank of Kenya. This means that if you lose your Bitcoin, you may never get it back since you can’t report it anywhere and no financial institution can help you track it.

Blockchain technology is very complicated so we will not dwell too much on the technicality.

We will only be showing you how to invest in Bitcoin in Kenya without losing your money.

Is Bitcoin Legal in Kenya?

Bitcoin is not illegal in Kenya; it’s just not supported by financial regulators. This means that you are free to trade or invest in Bitcoin but in case you lose your money, no financial institution can be legally held accountable.

The CBK in particular has publicly warned people against investing in virtual currencies such as Bitcoin because of their volatile and unregulated nature.

According to a public notice from the Central Bank of Kenya, while Bitcoin is not illegal per se, it is not considered legal tender.

A legal tender is a recognized economic or payment medium (such as the Kenyan notes) that you can use to fulfill a financial commitment such as buying goods or paying off debt.

Bitcoin is not legal tender because it is not recognized by a legal system like the CBK.

This means that you are not protected or insured in case you lose your investment.

So, when you decide to trade in cryptocurrencies such as Bitcoin, you need to understand that you are on your own.

What Can You Do With Bitcoin?

As we already mentioned, Bitcoin is a currency like the Kenyan shilling. The only difference is that it is digital. This means that you can use it for the same things you use your regular money for and even more.

Some of the things you can do with Bitcoin include:

Pay for services and products where they are accepted
Invest in property and other assets as you would do with your local currency
Travel and pay for hotels online in a digital environment where they accept Bitcoin
Send them to friends or family outside the country instantly without middlemen like banks

Bitcoin won’t work everywhere. In fact, it is not accepted in many places here in Kenya. This is because of its highly volatile nature.

Most businesses fear that they will accept Bitcoin and then the value could have dropped significantly by the time they want to convert it back into their local currency.

How Much is One Bitcoin in Kenya Shillings?

At the time of writing, one Bitcoin costs about 3,686,161.28 Kenya Shillings. However, due to the volatility issue we mentioned above, this number keeps changing.

Bitcoin has steadily risen in value since its inception in 2009. For example, one Bitcoin was valued at Kenya shillings (KES) 1.4 million on 25th October 2020.

However, the value has risen by over 364% to reach KSh 6.5 million in 2021. The price dropped significantly in 2022 and 2023 and is now trading just above KSh 3 million.

Why Should You Invest in Bitcoin in Kenya?

There are several reasons why you might want to invest in Bitcoin in Kenya including the following

Global acceptance and legitimization– Cryptocurrencies like Bitcoin are created to operate beyond borders making them borderless currencies. They can fit into any business model regardless of where you are located in Kenya. Bitcoin is digital and it doesn’t really matter where you live or how remote your area is, chances are that there is a platform for you to buy and sell Bitcoin.
Low fees- Due to the increased ease of cross-border transactions, the demand on exchanges like BitPesa has increased tremendously. As a result, sending money overseas becomes cheaper due to lower exchange rates when compared to traditional banks and remittance services like M-PESA.
High return on investment– The value of Bitcoin has been growing steadily since it came into existence in 2009. In June, one bitcoin was valued at $250 but its current value is now over $1000. Many people are now catching up to invest in Bitcoin and other cryptocurrencies because the returns have been amazing so far. Today, an investment of $1000 in Bitcoin can be worth over $5000.

How to Invest in Bitcoin in Kenya: The Exact Steps You Should Follow

The following are the steps you should take to begin your Bitcoin investment journey in Kenya ;

Understand the basics of Bitcoin Investment
Open an Account
Create a Wallet
Buy Bitcoins
Choose an Investment Strategy
Store Bitcoins, or hold for future sale
Sell Bitcoins

Step 1: Understand the Basics of Bitcoin Investment Kenya

Before you can start investing in Bitcoin, you need to understand how it works especially as an investment asset.

Otherwise, jumping in blindly will surely burn your fingers.

There is a lot of information on the internet and some books are written on this subject which you can read to get a clear picture of how Bitcoin investment works.

You don’t have to understand the whole concept of how cryptocurrencies and blockchain work. You just need to know what you are getting into as an investor or trader.

Step 2: Open an Account

There are many ways to buy Bitcoin.

You can use your fiat currency (USD, KES, and others) to buy BTC or you can mine it using special hardware.

However, this step is only important for people who want to buy Bitcoin.

First of all, you need an account with one of the many platforms that trade Bitcoin.

Before you open an account, consider the following factors:

The trading fees – Each platform has a fee that is usually included in the price when you buy or sell Bitcoin. This fee goes to maintaining the platform and paying for other costs associated with it.
The reputation of the platform – You should never open an account on a website that is not known by many people because it may have been hacked. The risk of losing your money is high when you use such platforms.
The security features offered – You should never open an account on a platform that doesn’t guarantee the safety of your account and any other vital information about you or your Bitcoin investment.

You can open an account with Bitpesa, Coinbase, or Luno which are the most popular platforms in Kenya. Some other good options are LocalBitcoins and Coinmama.

We recommend that you open an account with more than one platform so that you can diversify your portfolio of cryptocurrencies, and also be able to track them on different websites and apps.

For example, if you only use LocalBitcons, there is the risk that you will lose your investment in case of a hack because it is a single point of failure.

Step 3: Create a Bitcoin Wallet

Whether you want to trade, store, or invest in Bitcoins, you need a Bitcoin wallet. A Bitcoin wallet is just like a bank account.

This wallet serves two purposes;

For transactions (buying and selling)
To store or hold your Bitcoins

You can obtain this wallet through a Bitcoin platform or exchange which facilitates the buying and selling of Bitcoins. These include Paxful, CEX 10, Coinmama, LocalBitcoins, eToro, Binance, and Coinbase, among others.

In most cases, creating a Bitcoin wallet is free.

You only need to have an email address, ID, phone number, smartphone, and so on.

After successfully registering, your account is then verified against the details you provided, such as phone numbers and email addresses.

A message is sent to your phone to confirm ownership. Similarly, a link is emailed to your address. You must also secure your account by use of strong passwords supported by authentication, i.e. for every login you get a code in your phone.

Upon confirmation, you are given a unique reference number that can be used when someone is paying you in Bitcoins. The same reference number can be used to earn when referring friends and family.

Once verification is done, you are set to go.

Step 4: Buy Some Bitcoins

Now that you have an account and your very own wallet, the next step is to buy some Bitcoins. To do this, you will need to deposit some money into the platform you are using.

Each exchange has a minimum amount you can deposit.

For example, Paxful has set the minimum to $10 (Around KES 1,000).

There are three ways you can obtain Bitcoin in Kenya:

When you are paid Bitcoins for goods or services offered
By buying at the marketplace, usually referred to as peer-to-peer (P2P) marketplace.
By mining Bitcoin.

For the purpose of this guide, we are only going to discuss the second option.

How to Buy Bitcoins In Kenya

To buy Bitcoin in Kenya, you can follow these general steps:

Set up a digital wallet: Start by setting up a digital wallet to store your Bitcoin securely. There are various wallet options available, including online wallets, mobile wallets, desktop wallets, and hardware wallets. Research and choose a wallet that suits your needs.
Choose a reputable cryptocurrency exchange: Select a reputable cryptocurrency exchange that supports Bitcoin trading in Kenya. Some popular exchanges include Binance, Luno, and Paxful. Ensure that the exchange offers reliable security measures, user-friendly interfaces, and good customer support.
Complete the registration process: Sign up for an account on the chosen cryptocurrency exchange. This typically involves providing your personal information, verifying your identity, and setting up security features like two-factor authentication (2FA).
Fund your account: Once your account is set up and verified, you’ll need to deposit funds into your exchange account. Different exchanges support various payment methods, such as bank transfers, mobile money, or debit/credit cards. Choose a suitable payment option and follow the instructions provided by the exchange to deposit funds.
Place a buy order: After your account is funded, navigate to the trading section of the exchange platform and place a buy order for Bitcoin. Specify the amount of Bitcoin you want to purchase and review the transaction details, including any fees associated with the purchase.
Execute the trade: Once you’re satisfied with the order details, confirm the purchase. The exchange will execute the trade, and the Bitcoin will be credited to your exchange wallet.
Transfer Bitcoin to your personal wallet: It’s generally recommended to transfer your purchased Bitcoin from the exchange wallet to your personal digital wallet for added security. Locate the “Withdraw” or “Send” option on the exchange platform, enter your personal wallet’s receiving address, and initiate the transfer.
Secure your Bitcoin: Take necessary security measures to protect your Bitcoin holdings. This includes enabling additional security features on your personal wallet, such as encryption, and backup options, and keeping your wallet’s private keys offline and secure.

In addition to other payment platforms such as PayPal, most online businesses do pay for services rendered to them by Bitcoin. You only need to provide a unique number, which is your Bitcoin account number.

How to Sell Bitcoins in Kenya

You may want to sell Bitcoins either to make a profit or just to liquidate them into cash. Remember you cannot withdraw just like money in a bank. As such, you have to sell at the marketplace.

There are two ways to sell Bitcoins for Kenya Shillings:

By creating your own offer complete with your own instructions and price margins
By looking for a buyer at the P2P marketplace such as LocalBitcoins

The process is similar to when buying except that this time you are receiving the money. In order to make more profits from the sale, you need to look for a buyer offering high margins.

Since you are the one giving payment instructions, you must be careful not to give incorrect details.

Release Bitcoins immediately after you receive payments and don’t forget to leave feedback to your trade partner.

Ask them to also do the same. You need that feedback in your profile to gain the trust of other traders.

How to Become a Successful Bitcoin Investor in Kenya: Top Tips From Experts

Whether you are buying or selling Bitcoins, bear in mind the following key points;

Only deal with a vendor who is online, and whose profile is denoted by a green light. Never accept to deal outside the platform, as this may be fraudulent.
Speed is paramount. Traders are busy dealing with several offers. One’s profile also indicates average trade time. Who would want to deal with a slow trader? Yet the price of Bitcoin changes fast.
Always double-check payment details to avoid sending money to the wrong recipients
Confirm that your bundles are adequate to avoid going offline in the middle of a transaction. You will inconvenience your trade partner if that happens.
Always give feedback. It is important to build trust.

Common Bitcoin Investment Mistakes in Kenya to Avoid

Before you fully immerse yourself in this trade, exercise the following caution;

Strive to fully understand how Bitcoin trade works. You may lose your money if you jump into it emotionally with little information.
Never use brokers. Do not allow anyone to manage your account. They will fleece you.
Store your Bitcoin with reliable, trustworthy, and secure wallets which are well-known to prevent loss of money. Before settling on a particular platform provider, check all the details including feedback and reviews.

Trade with purpose, not just for the sake of having active offers. Study market trends carefully. When the markets are low, buy, and when high then sell.

Finally, thread carefully. Do not put all your eggs in one basket. Just like in gambling, invest only what you can afford to lose.