Is it safe to invest in cryptocurrency in India?

There’s been a huge boom in cryptocurrency investments in India in the last couple of years. You must be wondering if it is safe to invest in cryptocurrency in India. The short and sweet answer is ‘it depends, it’s complicated.’

Cryptocurrencies are unpredictable and volatile. There’s no scientific principle, administrative body and law that regulates these currencies or a market as a whole. Even if these currencies follow the basic principle of demand and supply for the determination of price, it’s very easy for an investor to manipulate the price.

The dream to be a billionaire overnight is pushing people to make risky investments. However, there’s no harm in the dream of billions, just make sure you take calculated risks. Though risky, investments in cryptocurrency can be safe if you diversify and invest insignificant amounts of money every month.

Thanks to cheap and reliable data speed more and more young investors are learning how cryptocurrencies, blockchains and technologies work. The median age of a cryptocurrency investor is just 24. The surge in crypto trades is large because of huge advertisements by brokers. Young adults are fascinated by movies and web shows such as Bazaar, Big Bull and Scam 1992 etc.

Cryptocurrency investments can be highly profitable. The only thing that makes investments in crypto so lucrative is the fact that they have huge potential to grow. Crypto investments can offer you returns that you can’t get anywhere else.

I bought SHIBA INU tokens worth ₹1,000 in May 2021 and while I am writing these post they are worth ₹11,870 (Oct 30, 2021). I couldn't have made more than 20% if I were to invest those ₹1,000 in stocks, mutual funds or bank deposits. At the same time I could have had huge losses if I sold those coins/tokens in July 2021, they valued to ₹440 only.

Is it safe to invest in cryptocurrency in India?

Yes, it is safe to invest in cryptocurrency in India if you know how much to risk and you have the patience to hold those investments for quite some time. However, the nature of cryptocurrency is highly volatile and unpredictable. To reduce the risk related to investment in cryptocurrencies and to make sure your investment in cryptocurrencies is safe you can follow these guidelines I’ve come up with:

1. Diversify your investments among varous options such as fixed deposits, gold, mutual funds, stocks, land etc.
2. Invest only an insgnificant amount of your earnings in cryptocurrencies, after investing in other options. For e.g. if you make Rs. 50,000 a month don’t invest more than a 1000-2000 per month in cryptocurrencies.
3. Diversify your cryptocurrency investment in top 10 cryptocurrencies. For e.g. if you invest Rs. 1000 a month in cryptocurrencies invest Rs.100 each in top 10 cryptocurrencies.
4. Hold, Hold & Hold – SELL! They say every dog has its day someday Dogecoin will have its day. Never sell your cryptocurrency holdings at loss. Be patiant and wait for the day when you have significant gain.
5. You need to keep yourself up to date with the latest events and opportunities if you want to make money via investments in cryptocurrencies. Keep reading various columns and articles from trusted sources such as coincrunch.
6. If you follow tips from random Telegram channels and WhatsApp groups about investments you’ll end up losing hard-earned money. Always make sure you’re following tips from trusted websites and platforms. Indians often fall prey to spammers and scammers on social media so make sure your investment advice is from a trusted source.
7. Use trusted apps to trade and invest. Make sure your broker is a registered Indian company because if there’s any change in laws in relation cryptocurrencies an Indian compnay will always ensure compliance. I use WazirX.

How to invest in cryptocurrency in India?

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