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:
- Diversify your investments among varous options such as fixed deposits, gold, mutual funds, stocks, land etc.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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?
Time needed: 20 minutes.
How to invest in cryptocurrency in India?
- Choose a crypto exchange of your choice.
As we have brokers like Upstox, 5paisa, Zerodha for trading in stocks, we have crypto exchanges like WazirX, Coinswitch Kuber, Unocoin, ZebPay, CoinDCX & Binance where you can buy or sell cryptocurrencies of your own choice. WazirX is an Indian owned exchange I’ll recommend but you can choose any of them.
The account opening fees are null. But, there are charges or commissions when you buy or sell a cryptocurrency (generally insignificant) you may want to compare them.
- Open an Account with a crypto exchange.
You’ll need to open an account with the crypto exchange of your choice. I’ll suggest WazirX, that’s what I use. You may need to provide them with your ID such as PAN or Aadhaar or both. Also, some of the crypto exchanges need you to provide a video verification and photograph.
OPEN WAZIRX ACCOUNT HERE!
- Add funds to your crypto exchange app.
The first thing you’ll need to do after opening a crypto exchange account is to add funds. You may use UPI, Net Banking, Wallet Transfer, P2P to add funds to your account. You may deposit USD or INR or many other currencies. There will be a convenience fee while adding funds, choose the one with the least cost.
- Research various cryptocurrencies that are available.
There are hundreds and thousands of currencies available to trade and invest on these platforms. You’ll need to choose a currency to invest. You can use the web to research and choose. I’d suggest choosing any of the top 10 currencies as a beginner. The research will take longer and that’s a topic for another article.
- Invest your funds.
After choosing a few currencies of your choice, buy them using the WazirX App or the app provided by your crypto exchange. Don’t invest in only one coin, diversify your portfolio while using your funds. Popular choices to buy are Bitcoin, Ethereum, Tether, Dogecoin, XRP, Cardano, Shiba INU, Blackcoin, WRX, Binance Coin etc.
Frequently Asked Questions
The one that gives the highest returns. My personal favourites are SHIBA INU & Dogecoin
It’s not regulated in India by the government or any other legal body.
Yes, it is. It’s not illegal. But it’s not accepted at stores.
There are hundreds of cryptocurrencies to invest in India. Generally, it is advised to stick to the popular ones though.
Privates players, Investors and founders. There’s no government body or governing law for the regulation in India.
As per the latest data, only 1.5 crore people have cryptocurrencies in India.
Yes, it’s legal in India.
No, cryptocurrencies are not banned in India.
There are apps where you can trade or invest in India. Popular ones are WazirX and Coinswitch Kuber
WazirX, Coinswitch Kuber, Unocoin, ZebPay, CoinDCX & Binance are some of the best apps to buy cryptocurrencies in India.
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