The popularity of cryptocurrency among people in India has been growing rapidly in recent years. While the Indian government has taken a cautious approach towards crypto, there is a growing interest among the public in investing and trading in cryptocurrencies.One of the reasons for the growing popularity of crypto in India is the lack of trust in traditional financial institutions. Many Indians have experienced issues with banking systems, such as high fees and long wait times for transactions to be processed.Crypto, on the other hand, offers a decentralised system that allows for faster and cheaper transactions.
Another reason for the popularity of crypto in India is the rise of digital payments. With the proliferation of smartphones and internet connectivity, many Indians are moving away from cash transactions and adopting digital payment methods. Crypto offers another digital payment option that is seen as secure and convenient.Furthermore, India has a large population of tech-savvy individuals who are interested in new technologies and digital innovations. Many of these individuals are early adopters of crypto and have helped to spread awareness and interest in cryptocurrencies.
Overall, the popularity of crypto in India is likely to continue growing in the coming years as more people become aware of its benefits and as the Indian government develops a clearer regulatory framework for crypto coin.This has led to a significant increase in the number of cryptocurrency exchanges and trading platforms, as well as the creation of new financial products such as cryptocurrency-based exchange-traded funds (ETFs).
So, for people who wanted to invest in it , here’s a simple guide:
Before investing in any cryptocurrency, it’s essential to research and understand the basics of how crypto works, the technology behind it, and the potential risks involved.
2. Choose a cryptocurrency exchange:
Choose a reliable cryptocurrency exchange that operates in India like CoinCred, WazirX, CoinDCX, and ZebPay. Make sure to do your research and choose an exchange that is secure and has a good reputation.
3. Sign up and complete KYC:
Once you have selected an exchange, sign up and complete the Know Your Customer (KYC) process. This involves submitting your personal identification documents such as Aadhaar card or PAN card.
4. Add funds to your account:
After completing the KYC process, add funds to your account using a bank transfer, UPI or other payment methods supported by the exchange.
5. Choose the cryptocurrency to invest in:
After funding your account, Wisely make a choice for cryptocurrency. Bitcoin and Ethereum are the most popular options, but there are many other cryptocurrencies available.
6. Place your order:
After selecting the cryptocurrency to invest in, place your order to buy it. You can either place a market order, which buys the cryptocurrency at the current market price, or a limit order, which allows you to set a specific price at which you want to buy the cryptocurrency.
7. Store your cryptocurrency:
After buying cryptocurrency, it’s important to store it securely in a digital wallet or hardware wallet to prevent it from being stolen. Some exchanges also offer the option to store your cryptocurrency on their platform.
8. Monitor your investment:
Keep track of the value of your cryptocurrency investment and be aware of any news or updates that may affect the market.
Before moving on, you should be aware of certain risks in investment in cryptocurrency:
1. Regulatory risks:
Regulatory risks in cryptocurrency refer to the potential for governments and regulatory bodies to introduce laws or regulations that negatively impact the use, trading, or possession of cryptocurrencies. The Indian government and the Reserve Bank of India (RBI) have issued warnings and regulations regarding cryptocurrencies. There is a risk that the government may impose additional regulations or restrictions on cryptocurrency trading and investing in the future.
2. Volatility risks:
Cryptocurrencies are known for their volatility and can experience sudden rise and fall in price . The prices can be impacted by various factors such as market demand, news, and global events.
3. Cybersecurity risks:
Cryptocurrency transactions are irreversible and not backed by any central authority. As a result, there is a risk of cyber attacks, hacks, and scams on exchanges, wallets, and other crypto-related services. It’s crucial to take appropriate measures to secure your cryptocurrency and keep it safe.
4. Liquidity risks:
Liquidity risk in cryptocurrency refers to the possibility of being unable to buy or sell a particular cryptocurrency quickly enough or at a fair price due to a lack of market participants or trading volume. The liquidity of cryptocurrencies in India is relatively low compared to traditional investments. It may be challenging to find buyers or sellers for your cryptocurrency during a volatile market, which can impact the price and your ability to buy or sell at a desirable price.
5. Technology risks:
Cryptocurrencies rely on blockchain technology, which is still in its early stages of development. There is a risk that the technology may not scale as anticipated, or there may be technical glitches that can impact the value of the cryptocurrency.
In summary, investing in cryptocurrency in India comes with significant risks,
and it’s essential to do your due diligence, understand the risks involved,
and invest only what you can afford to lose. You should also keep up-to-date
with the latest regulations and changes that may impact the cryptocurrency market in India.
By Nidhi Chaudhary.