The worth of Bitcoin has grown over 4 occasions and Ethereum by over ten occasions previously yr alone. Such returns have attracted many retail buyers to dip their toes on this new and intriguing asset class.
Extra kids or first-time buyers want to spend money on cryptocurrencies in India. Nonetheless, most buyers don’t perceive the crypto markets absolutely.
Listed below are 5 issues it’s best to learn about cryptocurrency markets in India
- Investing in crypto is just not Unlawful
There’s a widespread false impression that cryptocurrencies are unlawful.
Nicely, RBI did impose a ban on banks from facilitating cryptocurrency transactions in 2018. This round made your entire crypto group in India go haywire, and so they filed writ petitions to problem the ban.
Presently, the situation may be very totally different within the crypto house. Famend buyers are funding many fintech startups to construct the house. Extra retail buyers at the moment are thinking about dipping their toes available in the market. Greater than 2 million customers have registered as buyers in crypto start-ups like
within just six months after its launch.
Recently, RBI announced that it is examining the need to create a central digital currency (CBDC) to regulate the market, which could be a positive move for the crypto market.1
- Cryptocurrency transactions are taxed
Cryptocurrencies are indeed decentralised.
They are not controlled and regulated by a central authority or the government. However, this does not mean that you are not required to pay tax if you invest in cryptos.
Any income in India will be brought under the purview of income tax. Like every other investment, profits earned by investing in cryptocurrencies are also subject to capital gains tax under the Income Tax Act.
Depending on your holding duration, it may be classified as short term or long term capital gains. Some others also classify it under income from other sources in their returns.
However, the status of cryptocurrency, whether it is a currency or commodity is still vague. Unless there is a precise regulation governing the market, there is no way to say how these assets can be taxed.
- Cryptocurrencies are not expensive
Generally, when we say cryptocurrency, people tend to associate it to Bitcoin.
You may be aware that one Bitcoin price is now a whopping ~₹30 lakhs2 per coin. Many potential investors assume that they cannot afford to invest in such high valued assets and tend to stay away.
What most people are unaware of is that you can purchase Bitcoins in fractions also. In India, there are crypto exchanges like
, allowing their users to buy Bitcoin with a minimum investment of just ₹100.
Apart from Bitcoins, several other cryptos in the market also have an excellent potential of earning high returns.
- The value of crypto is as real as Rupee
Cryptocurrencies are digital assets and do not hold a physical form like paper money.
The intangible nature of cryptos has led many to believe that cryptos do not have real value and are just a set of codes.
The reality is that no currency possesses real value unless people believe in it.
For instance, Rupee in India holds significance because it is a sovereign currency, and people believe in its sovereignty.
Let us say that the government declares Rupee to be void overnight, and introduces a new currency; then Rupee will no longer hold value.
Similarly, many people have placed their trust in cryptocurrencies as a means of exchange and a store of value.
Although it is a decentralised system, it is being held together by a community.
- Investing in cryptocurrency is simple
Investing in cryptocurrencies often comes across as something suited for technologically knowledgeable people and that others may not succeed in it.
A couple of years ago, investing in cryptos was quite complicated, that scenario changed after the Supreme Court ruled out the RBI ban on cryptos.
Cryptocurrencies are nothing but money that exists only virtually.
It is a decentralised, digital currency that uses digital files as a mode of exchange instead of paper cash.
You can use crypto to buy goods or services, although most people worldwide use it as a store of value. Meaning, it is used as an investment tool just like stocks, bonds, etc.
The first and most popular cryptocurrency is Bitcoin. And there are over 8000 cryptocurrencies currently in circulation. Recently, cryptocurrency, as an asset class crossed the mark of $1 trillion in market capitalisation.
More startups like CoinSwitch Kuber have emerged in the crypto space to make it simpler for investors to buy/sell cryptos. If you want to invest in cryptos, all you have to do is choose the right platform of your choice, complete the KYC in less than ten minutes, and once your profile gets approved, you can start investing in cryptocurrencies immediately.
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