Wednesday, June 29, 2022

How To Invest In Cryptocurrency In India

Invest In Cryptocurrency At Your Own Risk Cautions Rbi Governor Shaktikanta Das

How To Invest In Cryptocurrency In India – Start With As Low As Rs 100/- NewsMo

Shaktikanta Das said it is his “duty” to caution investors, and told them to keep in mind that they are investing at their own risk.

New Delhi: Reserve Bank of India Governor Shaktikanta Das has cautioned investors on cryptocurrencies stating that they should invest in the same at their own risk.

Das said it is his “duty” to caution investors, and told them to keep in mind that they are investing at their own risk.

He also added that cryptos are a threat to macroeconomic and financial stability while comparing it with the historical ‘tulip mania’ which was widely considered to be the first financial bubble. He said that the cryptocurrencies do not even possess the value of the exotic flower.

“Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine RBI’s ability to deal with issues of financial stability and macroeconomic stability,” Das added.

The ‘tulip mania’ of the 17th century is often cited as a classic example of a financial bubble where the price of something goes up, not due to its intrinsic value but because of speculators wanting to make a profit by selling a bulb of the exotic flower.

In the Union Budget for 2022-23 presented in Parliament on February 1, the government proposed levying a 30 per cent tax on gains made on cryptocurrency trades by investors and the announcement was welcomed by cryptocurrency industry players, saying it legitimises their trades.

Guide To Invest In Cryptocurrency: Conclusion

As a beginner, you can be very attracted to crypto trading and commit some mistakes that might end your trading career. So you must know that almost all of the traders lose their initial trades, and its okay to fail initially. But this does not mean that you wont learn from your mistakes, cause if you dont, youll keep losing money and soon be rekt.

So it is crucial to understand how cryptocurrencies and the blockchain itself work. As then, youll determine which of the projects are fundamentally sound and which of the projects are just scams. You can then use many trading features such as trading bots, hardware/ software wallets, lending, staking, etc. However, you should always invest with a strategy and maintain proper risk management.

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Social media also has many self-styled advisors. Stay clear of them. Recently, the CEO of Indias largest stockbroker, Zerodha, Nithin Kamath, tweeted that he gets disheartened seeing people blindly following their favourite celebrities who endorse various cryptos and non-fungible tokens and other similar assets.

Dont Invest In A Crypto Because Your Neighbour Did So

No two investors are alike. Ideally, investments should be based on several factors like risk appetite of the investor, expected return, time horizon and others. Based on these factors, investors need to see whether a particular instrument fits into the asset allocation or not, says Rishad Manekia, Founder and MD, Kairos Capital. Therefore, the investment approach will also differ. And this is true for all investments, not just cryptos.

However, given that many investors, especially young investors, are interested in this asset class but are not aware of the details, they get swayed by what their peers say.

Crypto is an unregulated instrument and therefore there is no recourse if anything goes wrong. Investors should be cautious of the pitfalls of these instruments and do their own due diligence, says Manekia.

Just because your friend was lucky enough to get high returns by investing in a crypto, it does not automatically mean the same thing will happen with you too. Do your own research and invest accordingly.

Dont Try To Make A Quick Buck

Beware of Suspicious ICOs

Recommended Reading: What To Learn About Cryptocurrency

Find The Right Crypto Exchange

A crypto exchange is a platform where you can buy, sell and trade cryptocurrencies. There are two types of crypto exchanges, a centralized and decentralized crypto exchange.

The centralized cryptocurrency exchanges require their users to verify their personal information before using the tools provided by them. If the user is an organization, then it must provide some corporate information for the process of verification.

A decentralized crypto exchange is very similar to centralized crypto exchange but without third-party intervention.

The verified users on these exchanges get to enjoy a higher withdrawal quota along with other customer support in case of any technical error. The centralized cryptocurrency exchanges are quite popular among crypto enthusiasts since they offer flat pairs at stable prices.

A decentralized crypto exchange is very similar to centralized crypto exchange but without third-party intervention. These exchanges do not rely on any third party, The funds in the exchange are stored on the blockchain. Peer-to-peer trading is also allowed by these exchanges that require the use of an escrow system or proxy tokens. This is different from the IOU system used by centralized cryptocurrency exchanges.

Read about the Centralized and Decentralized crypto exchanges to have a better understanding of choice.

The Investment Has To Be Made

How to Invest in Cryptocurrency in India  bitcoin me ...

Once the accounts have been linked and the money has been transferred to the crypto exchange account, the investor needs to make a decision as to which coin they would like to invest in. The most popular cryptocurrency in the world is bitcoin, followed by ethereum by the market capital that is present. Tether, binance coin, dogecoin, cardano, XRP, are other important leading coins. Once you have made a purchase, store the codes to the account in order to prevent any kind of risks. Storing the coins that have been purchased in a crypto wallet is the advice which has been given by experts.

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Adopting Proper Risk Management

Risk management is considered the most crucial part of any type of investment. It is so because before entering a trade, it is best to mitigate your risks and minimize your losses. You must make more winning trades at the end of the day than the losing ones. Only then youll be able to strive in the crypto trading market.

Can We Trade Cryptocurrency In India

Good question. Yes, you can trade cryptocurrency in India. But I would suggest No if you are new to the Crypto world.

Huge swings and volatility may eat your position and finally leaves you naked. Yes, you heard it right. The crypto market is news-driven. Most cryptocurrencies you will be trading are not driven by their underlying asset as there is no underlying asset for most cryptocurrencies.

Hence huge fluctuations prevail in the crypto market which is difficult to withstand for a newbie. If you still want to trade, I recommend you to paper trade until you are confident and feel manageable.

As crypto is not regulated to date, in India, it is better to choose cryptocurrency as an investment.

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Which Is The Next Coin Going To The Moon

Dogecoin. I bet you wanted to read this, but hold on, nobody on this planet can tell you which coin is going to the moon. However, the number of bitcoin is limited to 21 million. Hence, its value tends to rise over time. And if anyone tells you about a cryptocurrency and is sure that its going to be the next million-dollar coin. Do not believe him/ her, and invest at your own risk, as they can be scammers.

How To Buy Bitcoin In India

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The process will be the same as the above steps for buying Bitcoin in India. Since BTC has gained so much in value, many users will not want to purchase a full Bitcoin. Brokerages will let you buy fractions of a Bitcoin. For example, you could buy 0.002 BTC or lower amounts. Exchanges offer many ways to trade Bitcoin and other cryptocurrencies. You may buy and hold your Bitcoin, or trade it in short intervals like day trading or swing trading.

Investors interested in how to trade Bitcoin in India could also set up a Bitcoin wallet and put an offer on a peer-to-peer exchange like Paxful. Then, they could deposit an amount of rupees to trade with another person for Bitcoin.

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How To Invest In Bitcoin In India

Bitcoin gave birth to a whole new asset class that investors all over the globe have become interested in. But why buy and sell Bitcoin in India in particular, you ask? Well, firstly, theres the fact that it gives out high returns and is one of the top-performing assets across the globe right now.

The frequent price fluctuations of Bitcoin make it a good investment for investors who are okay with taking risks and traders who want to make quick and high returns out of their investment.

Its notable that amidst the pandemic situation, Bitcoins price hiked up as more and more investors took notice of it due to global institutional support and put their faith behind this asset class. Its price had skyrocketed to around $47,000 by the end of 2021.

As of 2022, Bitcoins price stands at around $36,000 nearly INR 28 lakhs for Bitcoin price in India. And according to Bitcoin price predictions for 2022, Bitcoins price just might hit $100,000 by the end of 2022!

Aside from that, since Bitcoin was developed to be a deflationary asset, its supply is capped at 21 million. Between this limited supply and the Bitcoin halving, Bitcoin provides investors with a hedge against inflation.

How Stable Are Cryptocurrencies

In January this year, Bitcoin skyrocketed to $40,000 . Continuing its bull run, it reached an all-time high of $65,000 towards the end of April. Then in May, it plunged and throughout June it remained below $30,000 . Again the prices have skyrocketed, and at the time of writing this article, the price of Bitcoin is Rs 51 lakhs approx.

Read Also: How Do Crypto Taxes Work

Using The Technical Indicators

Almost all the platforms offer a chart with many features. You can instead use the one available at TradingView to access virtually all the technical indicators available. Five of the essential technical indicators are as follows:

  • Relative strength index : The RSI of an asset shows whether the asset is in an overbought or oversold state at a particular moment. Briefly, it is time to sell when the RSI value goes above 75, and its time to buy when it goes below 25. However, at times, you cannot be dependent on RSI alone.
  • Moving Average : The moving average helps you determine the direction of the trend. It depends on historical data hence it is a lagging indicator.
  • Moving Average Convergence Divergence : MACD is preferably used to observe the momentum of an asset by representing a relationship between two moving averages. It is primarily used in combination with RSI, as both determine the momentum but use different factors.
  • StochasticRSI : You can determine the StochRSI by applying a formula known as the Stochastic Oscillator formula to typical RSI values. However, since it is more sensitive than RSI, it tends to generate a few misleading signals.
  • Bollinger Bands : The Bollinger Bands measure the markets volatility and the overbought and oversold conditions.
  • How Can You Store Your Cryptocurrency

    How to Invest in Cryptocurrency in India with Little Money ...

    Cryptocurrency can be stored in something called a wallet, which can be accessed by using your private keythe crypto equivalent of a super-secure password without which the crypto owner cannot access the currency.

    A crypto wallet stores the private keys that give the user access to their cryptocurrenciesallowing one to send and receive cryptocurrencies like Bitcoin and Ethereum. It should be noted that your coins are stored on the blockchain, and the private key is required to authorise transfers of those coins to another persons wallet.

    There are different types of crypto wallets available that cater to different requirements in terms of security, reliability, accessibility, etc.

    Recommended Reading: How To Sell Your Crypto For Cash

    Choose A Cryptocurrency Exchange

    You cant purchase cryptocurrency through a bank or an online brokerage like Fidelity or Vanguard, so youll have to use a cryptocurrency trading platform. There are a ton of cryptocurrency exchanges out there, ranging from easy-to-use systems to complex dashboards for advanced traders.

    Since Ethereum is so popular, most cryptocurrency exchanges will let you buy ether, but we recommend sticking to a few of the more-popular exchanges like Coinbase, Gemini, or eToro. Ethereum is also one of the few types of crypto you can buy on platforms like Venmo or PayPal. Different platforms come with different fees, security measures, and may include other features, so its a good idea to do some research before you sign up.

    Tips To Invest In Cryptocurrency In India

    #1. Have a medium-term view

    Cryptocurrency investment is not an overnight get-rich scheme. Yes, many people are becoming rich with crypto investments but the risk of losing money is equally high.

    Dont buy at the high price and sell at the low price. Have some patience and research well before investing.

    #2. Keep 10% of the overall portfolio in Cryptos

    You should not keep more than 10% of your portfolio investment in cryptos. This will ensure that your portfolio is diversified in Stocks, Mutual Funds, Gold, Fixed Deposits and Real Estate.

    In case there are negative returns from cryptocurrency then also you have returns from other investment assets.

    #3. Invest as per your risk-taking capacity

    Cryptocurrencies are highly volatile, i.e. their price fluctuates heavily as compared to other investments like stocks or mutual funds.

    For example, the bitcoin prices were at $1,000 in January 2017 which increased to $19,000 in December 2017 and then sharply fell to $6,500 in February 2018.

    The price crossed $50,000 in February 2021 to reach $60,000+ in April 2021 before falling again to $57,119 on 12th May 2021.

    You should invest only if you have the capacity to hold on to your crypto investments even in the time of huge price fluctuations.

    #4. Keep away from FOMO

    Fear of missing out or FOMO can create situations where you get compelled to invest in cryptocurrency without even knowing what it is.

    Also Check: How To Buy Crypto In The Us

    What Is The Best Move With Crypto

    Timing a cryptocurrency buy can be a difficult if not treacherous thing to attempt since there are all kinds of elements that go into the price of a coin. Although there are fewer personality-based drivers , there are more lemming-like sell-offs. People have only so much tolerance for risk, and the fear of missing out on selling a crypto holding for a short-term profit is a tempting siren song.

    With crypto, like with any kind of investment, your best bet will always be to hold on for the longer term, and buy a little bit at a time. Your highest returns will come from this strategy, even though it’s not particularly sexy and doesn’t provide any of that Vegas-like thrill for investors hoping for a quick winner.

    Choosing The Right Platform To Invest

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    Ashish Singhal, Co-founder & CEO, CoinSwitch Kuber, said it is important for people to choose the right platform to invest.

    Choosing the right platform for investing in cryptocurrency is very important for investors. This will ensure that their hard-earned money is secure, Singhal said.

    Before making your investment, the first step is to know what you are investing where CoinSwitch and others are helping the industry grow from the knowledge standpoint and second is choosing the right platform, he added.

    Experts discuss the roller-coaster world of cryptocurrencies and what India should do about it at India Today Conclave 2021. #cryptocurrency#Bitcoin#ABetterNormal


    Ashish Singhal said crypto is the way to the future, adding that many new age companies building their business based on blockchain technology.

    Crypto is a new asset class alongside others like mutual funds, stocks and others. Investing in cryptocurrency is risky but rewarding at the same time. As an investor you should build a comprehensive portfolio for yourself, crypto being a part of it, he added.

    On the growing popularity of cryptocurrency in India, he said, Today we have people from 4,000 cities across India investing through Coinswitch in Cryptos. At least 55 per cent of our audience, over 6 million, are from tier 2 and tier 3 cities. The average age is about 25.

    Recommended Reading: How To Create An Crypto Exchange

    Things Not To Do As A Beginner In Crypto Trading

    All of us make mistakes, we do, but if its your hard-earned money at stake, you should be careful about the mistakes you make. Now, let us understand things you should not do as a beginner:

    • We highly recommend starting trading from smaller amounts, and you should focus on taking smaller returns.
    • You must remember that the crypto market is highly volatile, and things can change within the blink of an eye.
    • Before investing even a tiny amount, you should keep your human emotions, such as greed, fear, etc., out of your trading.
    • It is best if you start with spot trading and do not go into leverage trading. Even though leverage offers higher returns as you can also lose all of your capital in margin trading.
    • You should always use a stop-loss to minimize your losses and implement all of your risk management skills.
    • You should stay away from pump or dump calls on many discords or telegram channels as a beginner.
    • You should always have a trading plan in your head and try and make more winning trades than you lose.
    • Many beginners go for cheaper coins and expect them to pump, but thats not how cryptocurrencies work. To understand better, you should study the fundamentals of the coin.

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