{"id":347,"date":"2021-03-11T06:19:53","date_gmt":"2021-03-11T06:19:53","guid":{"rendered":"https:\/\/blog.paymeindia.in\/?p=347"},"modified":"2023-09-25T06:25:15","modified_gmt":"2023-09-25T06:25:15","slug":"starting-to-invest-in-cryptocurrency-from-scratch","status":"publish","type":"post","link":"https:\/\/www.paymeindia.in\/blog\/starting-to-invest-in-cryptocurrency-from-scratch\/","title":{"rendered":"Starting to Invest in Cryptocurrency from Scratch"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\"><em>\u201cYou can\u2019t stop things like Bitcoin. It will be everywhere and the world will have to readjust. World governments will have to readjust.\u201d<\/em><strong><em>\u00a0\u2014 John McAfee<\/em><\/strong><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Investing in\u00a0<strong>Cryptocurrencies\u00a0<\/strong>is still a confusing idea for many people, but its surging value through the last few months has gotten everyone paying attention again. As per data, Bitcoin has given the best returns to investors in 2021 so far (up 33% YTD), GOLD (<strong>safe-haven)<\/strong> being the worst performer.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">It has now proved to become an investment option that beats mutual funds, bank fixed deposits, or even Sensex and Nifty returns over a three-year horizon. The trouble is, not many understand what it means to invest in cryptocurrencies.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><em><strong>What is Cryptocurrency?\u00a0<\/strong><\/em><em>A cryptocurrency is a new form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities. They don\u2019t physically exist but it doesn\u2019t mean they aren\u2019t worth anything. The word \u201ccryptocurrency\u201d is itself derived from the encryption techniques which are used to secure the network.<\/em><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Let\u2019s move forward this discussion in four parts.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>1)\u00a0Is it legal to invest in crypto in India?<\/strong><strong><br \/>2) Why &amp; How much to invest in crypto?<br \/>3) How Can I get started today (now)?<br \/>4) Risk associated while investing in crypto.<\/strong><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">1) Is it legal to invest in crypto in India?<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>Yes, it\u2019s legal!<\/strong>\u00a0(As of today 19 Feb 2021)In 2018, the RBI barred regulated entities (such as banks) from dealing with Bitcoin. but later in the year, the Supreme Court also backed this decision. While holding Bitcoin was never made illegal, the SC decision means that companies in this space can do business more easily. There are no\u00a0<a href=\"https:\/\/cleartax.in\/s\/bitcoins-taxes-india#what\"><strong>rules<\/strong><\/a>, regulations, or guidelines in place for resolving disputes that could arise while dealing with Crypto. This amplifies the risk factor while dealing with cryptocurrency in India. However, it is legal to buy and sell cryptocurrencies in India.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">2) Why &amp; How much to invest in crypto?<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>Why to invest?\u00a0<\/strong>Elon Musk-owned electric carmaker\u00a0<strong>Tesla\u00a0<\/strong>has recently announced that it had converted $1.5 billion (~10,800 core INR) of its cash holdings into Bitcoin and will accept the cryptocurrency as payment for its products in the future. Analysts from\u00a0<a href=\"https:\/\/economictimes.indiatimes.com\/chris-wood-break-the-bank-to-buy-bitcoin-on-any-pullback\/articleshow\/80893030.cms\"><strong>Jefferies<\/strong><\/a>\u00a0believe that\u00a0<em>\u201cInstitutional ownership of Bitcoin has only just begun, Where Musk goes, others will now surely follow\u201d.\u00a0<\/em>See the below one:<\/p>\r\n<p>Many traditional businesses are integrating cryptocurrency into their platforms in some forms like Twitter &amp; Reddit uses Dogecoin to reward people. In Oct 2020, PayPal launched a new service that made it possible for their account holders to buy, sell, or hold cryptocurrency, or to use it to buy stuff at 26 million different merchants. Most recently, North America\u2019s <a href=\"https:\/\/www.bloombergquint.com\/markets\/all-you-need-to-know-going-into-trade-on-february-19\">first Bitcoin ETF<\/a>\u00a0got off to a stellar start in its debut, with investors exchanging $165 million worth of shares.<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>Cryptocurrency is decentralized, open-source nature helps to eliminate the weak points of the modern banking system by bringing access directly to consumers.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><em>As per Forbes, A\u00a0<\/em><a href=\"https:\/\/www.forbes.com\/sites\/billybambrough\/2020\/11\/19\/leaked-citibank-report-reveals-bitcoin-could-rocket-to-300000-price-by-end-of-2021\/?sh=f35069d6eabd\"><em><strong>leaked Citibank report<\/strong><\/em><\/a><em>\u00a0reveals that Bitcoin could rocket to $300,000 price by end of 2021.<\/em><\/p>\r\n\r\n\r\n\r\n<h3><strong>How much to invest?<\/strong><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">About 5 to 10% of one\u2019s portfolio (for high risk takers) with cryptocurrency investments for good returns. The rest of the portfolio can be filled with direct equities, MFs, Fixed deposits, commodities and gold. Experts suggest a small portfolio allocation in cryptos, preferably as an SIP.A few months back I started with\u00a0<a href=\"https:\/\/coinswitch.co\/in?ref_tag=CSSFETRNUC\"><strong>Coinswitch<\/strong><\/a>\u00a0and made few of my investments in\u00a0<a href=\"https:\/\/bitcoin.org\/en\/\"><strong>Bitcoin<\/strong><\/a>\u00a0and\u00a0<a href=\"https:\/\/ethereum.org\/en\/\"><strong>Ethereum<\/strong><\/a>\u00a0and returns indeed surpassed my expectations &amp; outperformed (up 58%) the equity and MF portfolio.(<em>This doesn\u2019t mean it\u2019s a buy recommendation for you<\/em>).<\/p>\r\n<p>Generally Crypto assets experience large fluctuations in price because of institutions investing in Bitcoin. Many multinational players have got into the market and investing some of their clients\u2019 money. Hedge funds are also hedging their portfolios against inflation in Bitcoin and other cryptocurrencies. Previously, they used to hedge against inflation by investing in gold.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">3) How Can I get started today (now)?<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">As per\u00a0<a href=\"https:\/\/coinmarketcap.com\/\"><strong>coinmarketcap<\/strong><\/a>\u00a0there are 4,100 investable cryptocurrencies are available. In India, you can buy crypto assets from several online exchanges like\u00a0<a href=\"https:\/\/coinswitch.co\/in?ref_tag=CSSFETRNUC\"><strong>Coinswitch<\/strong><\/a>,\u00a0<strong>BuyUCoin<\/strong>,\u00a0<strong>Coinshare<\/strong>,\u00a0<strong>Unocoin<\/strong>\u00a0etc. These exchanges will allow you to buy, sell, and hold cryptocurrencies. Most of them use like using safe Internet practices two-factor authentication and unique and strong password. As I said, I only used\u00a0<a href=\"https:\/\/coinswitch.co\/in?ref_tag=CSSFETRNUC\"><strong>Coinswitch<\/strong><\/a><strong>\u00a0<\/strong>and have no idea about others.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">These exchanges will have a KYC (Know Your Customer) requirement. This is a quick 2-min process which involves verifying your identity using your government-issued ID cards like an address proof, PAN card, and your bank account details.<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><strong>Crypto<\/strong>\u00a0markets are fully\u00a0<strong>24 hours<\/strong>\u00a0a day, seven days a week.<\/li>\r\n<li>You need to transfer funds to these exchanges online.<\/li>\r\n<li>Once you place an order, you can purchase the cryptocurrencies using these digital payment methods.<\/li>\r\n<li>You can sell anytime and funds will be instantly available (unlike stocks which takes T+2 days to settle) to withdraw.<\/li>\r\n<li>You don\u2019t need to buy a whole coin to start your investment. You can start your Bitcoin or other cryptocurrencies investment by chipping in as low as Rs. 500.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">There are seven million crypto holders in India with over a billion dollars in crypto assets. The majority of the crypto traders are in the 25\u201335 age ground.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">4) Risk associated while investing in crypto<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Although investment in cryptocurrencies seem like a great investment, it\u2019s important to do your research before you take the plunge. Experienced investors who know what they\u2019re doing won\u2019t need to be told this, but for beginners, it can be\u00a0<strong>very risky<\/strong>.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">For example, one Litecoin would have set you back more than $300 at the end of 2017 ($306.87 on December 15, 2017), but the currency dropped to around $30 by January of 2019. At the time of this writing, one Litcoin is worth $231.54.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">And we all know that Bitcoin fell below $4,000 per coin in January of 2019 before hitting an all-time high (so far) at $56,000+. While it\u2019s always fun to win, that\u2019s a wild ride many people would never want to be on.<\/p>\r\n\r\n\r\n\r\n<h3><strong>Recent updates and caution:<\/strong><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The Indian government is readying a law that may provide 90 days to crypto exchanges to unwind their operations in India apart from making in illegal to trade, invest or hold Bitcoins and other cryptocurrencies. The government may ask the RBI to notify the law once it\u2019s passed. One of the uncertainties for crypto exchanges and investors is whether the law will ban holding\/Trading crypto assets in India or whether it will apply to Indians holding\/trading anywhere. Big investors are already looking at ways for moving their crypto assets from Indian to other bitcoin-friendly nations such as Singapore or Malta.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>Disclaimer:<\/strong>\u00a0This post is only for educational and knowledge purposes, not investment advice anyway. Past performance is not necessarily indicative of future results. All investments in crypto carry significant risk and all investment decisions of an individual remain the specific responsibility of that individual.<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>\u201cYou can\u2019t stop things like Bitcoin. It will be everywhere and the world will have to readjust. World governments will have to readjust.\u201d\u00a0\u2014 John McAfee Investing in\u00a0Cryptocurrencies\u00a0is still a confusing idea for many people, but its surging value through the last few months has gotten everyone paying attention again. As per data, Bitcoin has given [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":1842,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"none","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"both","_seopress_redirections_param":"","_seopress_redirections_type":301,"_seopress_analysis_target_kw":"","_seopress_news_disabled":"","_seopress_video_disabled":"","_seopress_video":[],"_seopress_pro_schemas_manual":[],"_seopress_pro_rich_snippets_disable_all":"","_seopress_pro_rich_snippets_disable":[],"_seopress_pro_schemas":[],"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[112],"tags":[],"class_list":["post-347","post","type-post","status-publish","format-standard","has-post-thumbnail","category-cryptocurrency"],"blocksy_meta":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.paymeindia.in\/blog\/wp-content\/uploads\/2021\/03\/Invest-in-Cryptocurrency.jpg?fit=1080%2C608&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/posts\/347","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/comments?post=347"}],"version-history":[{"count":4,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/posts\/347\/revisions"}],"predecessor-version":[{"id":2243,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/posts\/347\/revisions\/2243"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/media\/1842"}],"wp:attachment":[{"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/media?parent=347"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/categories?post=347"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paymeindia.in\/blog\/wp-json\/wp\/v2\/tags?post=347"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}