The bitcoin bandwagon has been out in the market for quite a while. Ever since it was introduced in 2009 by Satoshi Nakomoto, the value of bitcoins has grown tremendously.
With increasing popularity, more and more potential investors are interested in buying bitcoins if you are one among them and are seeking to get higher returns from bitcoins –great!
But before that, if you are unaware of Bitcoin, here is a brief premier about it:
Bitcoin is the world’s first decentralized digital currency.
Let me break it down further:
- Decentralized – Their value is not determined or controlled by any individual or entity
- Worldwide – The cost of bitcoin remains constant across the globe, unlike fiat currency.
- Digital – Bitcoins have no physical form and can only be accessed online.
- Currency – It can be used as a medium of exchange to buy goods and services.
Bitcoins are radically different from the actual currencies like INR or USD. If you are new to the world of bitcoins, there are a few things you need to know.
Things To Know Before Making Bitcoin Investment In India
#1. Bitcoins Are Not Illegal In India
Over the past two years, bitcoins have made a lot of noise in the news regarding many things, including the RBI circular declaring a ban on financial institutions from facilitating crypto-based transactions.
This came as a significant setback for the industry. Long story short, the Supreme court ruled against the RBI’s ban in March 2020.
No law so far makes mining, buying, selling, trading bitcoins, or alike cryptocurrencies illegal in India.
Recent reports suggest that the government, which is the most prominent cryptocurrency critic, is now discussing plans with the RBI to regulate the sector. It is safe to say that Bitcoin may soon take its place as a mainstream investment asset.
#2. Bitcoin Prices Are Volatile
Bitcoins is a very young market, and many factors are influencing its price. But mostly, it depends on demand and supply.
Since bitcoins are a limited source, higher demand could drive the prices and vice versa. The market is highly volatile and is considered to be very risky.
Though the risk is good for returns, you could minimize it by conducting your research before investing. Always remember the golden rule to investing – Never invest anything that you cannot afford to lose in any asset class.
#3. The Highest Growing Asset Of The Decade
We already know that bitcoin showed humungous growth since its inception. Did you know that between March and August 2020 alone, Bitcoins delivered a 101% return on investment?
Despite its volatile nature, Bitcoin gained the title “Best performing asset of the decade.” And why is that?
You ask – Well, in the past decade alone, i.e. 2010 to 2020; bitcoin has seen a whopping 9,000,000% rise in value. To give you some perspective, for example, Bitcoins purchased for ₹100 in 2010, would now be worth ₹9,00,000.
#4. Bitcoin Transactions Are Irreversible
A payment made using bitcoins cannot be reversed. Once a transaction is complete, you do not have the option of cancelling it. This means you should make sure to carry business only with trusted individuals or organizations with a good reputation.
Bitcoin wallets usually detect typos and ensure that you do not send money to an invalid address by mistake. Still, it is best to be vigilant and control transactions for more safety and security.
#5. Bitcoins Are Transparent
All bitcoin transactions can be traced back to the user. There is a widespread belief that Bitcoin transactions are completely anonymous.
In reality, it is just the opposite. Though your personal information is not displayed in public, anyone can view your public address through which transactions are made.
Bitcoin transactions are transparent; every purchase or sale you make using bitcoins is recorded in the Bitcoin’s database. Bitcoin database is a public ledger that is available to all users and is backed by blockchain technology.
The transparency of the blockchain maintains the Bitcoin network’s integrity and prevents tampering of the records by fraudulent parties.
Jumpstart Your Bitcoin Investments In India
The most important thing anyone should know before buying bitcoins is that trading in Bitcoins is effortless. Over 190 crypto exchanges are currently operating globally and are open for trade 24 hours and 365 days in a year.
However, it is advisable to choose a highly secure and reliable trading platform for your Bitcoin investments.
CoinSwitch Kuber app for trading cryptocurrencies in India is especially allowing crypto investments for as low as 100 INR with one of India’s fastest KYC procedures.
Given that Bitcoin is a highly volatile young market, you should conduct extensive research before delving into it and never over commit yourself to it.
FAQ on Bitcoin Investment:
1. Is it worth making a Bitcoin investment?
Yes. If you can withstand the market volatility and have adequate knowledge of the market, then it is great to have some bitcoins added to your investment portfolio.
2. How safe is it to invest in Bitcoin?
We cannot say that it is absolutely safe to invest in Bitcoins. If you are a risk-friendly investor who can withstand market volatility, you can consider investing in Bitcoins.
3. How much should I invest in Bitcoin to start?
It is up to you to decide. But if you want to start small, most exchanges in India have a minimum capital requirement between ₹100 – ₹500. You can start investing in Bitcoins with just ₹100 using CoinSwitch Kuber.
4. What is the procedure of Bitcoin investment in India?
To start investing in Bitcoin in India, you first need to create an account on any trusted exchange like CoinSwitch Kuber. Once you have a KYC’ed account on an exchange, you can transfer funds from your bank to your exchange account and buy Bitcoins.
5. Which is the best company for Bitcoin investment?
Some of the top cryptocurrency exchanges include CoinSwitch Kuber, Zebpay, CoinDcx etc. However, each of these exchanges have their own USP’s and based on the features that you are drawn to; you shall make your choice.
6. How much tax is applied to profit earned in Bitcoin Investment in India?
Profits from Bitcoins in India are treated as Income from business and is taxable as per the prevailing tax laws
[su_note] KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing. [/su_note]
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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