How to invest in Cryptocurrency in India?
Cryptocurrency is digital money. It is expected to be the future of digital investments. The Crypto world is expanding at an immense rate. At present, there are more than 20,000 crypto tokens in circulation.
According to recent reports, India is one of the leading countries in crypto investment. If you are also wondering about Cryptocurrency investment in India this is the right article for you.
If you are new to the crypto world you might get overwhelmed with the options. You can check these best cryptocurrencies to invest in 2024.
5 steps to invest in cryptocurrency in India
1. Buy crypto- Brokers or crypto exchange
This is the first step to investing in Cryptocurrency in India. The best options are crypto exchanges or brokers. Both of them let you buy crypto but they have differences.
Crypto exchange
Crypto exchange is a platform where buyers and sellers meet. Exchanges have affordable fees but their user interface is complex to handle. They are not suitable for beginners. However, you can look for a beginner-friendly option that may be slightly expensive but easier to use.
To save your money, you can invest your time in learning to operate standard trading platforms.
Tips: Ensure your crypto exchange platform offers investment in your preferred payment mode. Some crypto exchanges are limited to a few payment methods. While some allow buying new crypto using crypto coins.
Brokers
Brokers are a simplified version of investing in crypto. They offer an easy-to-use interface that interacts with the exchange platform for you. The fees can be slightly high for brokers. But some brokers also claimed to be free. But in such cases, you are paying the fees through your information.
They sell the information about your activities and investments in the crypto market and make money out of it. Brokers are very convenient but you must be very careful while selecting them. Because in some cases they make transferring the cryptocurrency asses to other platforms very inconvenient.
If you want to invest in Cryptocurrency in India you must be very careful while selecting your medium. Because the risk of fraud is high if you are not alert.
2. Open and verify your account
Once you have made up your mind about a crypto exchange or broker you can create your account. You also need to verify your identity to protect yourself from any fraud. The verification process can differ for platforms. The amount that you will invest can also make a difference in the verification.
You cannot initiate the investment process without verification. The platform can ask for your certified document like a driver’s license or PAN card for verification. It can also request you to upload your selfies to authenticate the uploaded documents.
Verification is a crucial step to invest in Cryptocurrency in India. It protects you from fraud and helps meet federal regulatory requirements.
3. Deposit cash in your account
Your crypto account will help you buy crypto. But for that, you need to deposit money in it. You can ensure funds in your crypto account by linking your bank account with it. You can also authorize a wire transfer or make a transaction via credit or debit card.
Depending on your crypto platform and account funding method you may have to wait for a few days to buy crypto.
Tips: Avoid using your credit card for cash deposits in a crypto account.A credit card can be very risky and expensive for such deposits. Credit card companies treat crypto purchases as cash advances. Because of this, you have to pay higher interest rates than regular purchases. You may also have to pay additional cash advances. In simple words, you may be charged 5% of the transaction amount in a cash advance. Plus, there will be additional charges of crypto exchange or brokerage fees. These all may sum up to 10% of your crypto purchase.
4. Invest in cryptocurrency
Once your money is ready to invest you can buy crypto. There are thousands of crypto coins available in the market. You need to select one which will suit your goals and budget. Here you can take help from this article- best cryptocurrencies to invest in 2024.
When you have finalized your coin you can enter its ticker symbol like BTC for bitcoin. You also need to enter the number of coins you would like to purchase. You can also buy a fraction of the coins.
Coins like Bitcoin and Ethereum are very expensive. For a beginner, it is better to purchase a fractional share than invest such a big amount in a coin. Know about the tax on cryptocurrency in India.
Currently, these coins are at the apex of the crypto market in India:
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Binance Coin (BNB)
- XRP (XRP)
- Terra (LUNA)
- Cardano (ADA)
- Solana (SOL)
- Polkadot (DOT)
- Litecoin (LTC)
Source: Forbes Advisor
5. Select a storage method
Crypto exchanges need safe storage space. Unlike other digital assets, they are not backed by protections. They are prone to hacking and theft. You can store them in three places:
Crypto exchange– Crypto exchanges usually have crypto wallets where your purchased coins get stored. You can leave your crypto coins there. But if you don’t like to store it in your exchange platform you can easily transfer it to a hot or cold wallet. But for transferring the assets you need to pay a small fee.
Hot wallets- Hot wallets are digital wallets. Here crypto is stored online via internet-connected devices such as tablets, laptops, or computers. Hot wallets are convenient options to store crypts but they are prone to risk. They are still connected to the internet. Hence, there is a chance of online fraud and hacking
Cold wallets- Cold wallets are the safest options for crypto storage. They are not connected to the internet. They are hardware devices like a USB drive or a hard drive. You need to be careful with cold wallets. If you lose the code to access them you can lose all your money. This has happened to many people and some have even lost millions.
This can also happen with hot wallets. But some hot wallets are run by custodians who can help you get your account back if you have logged out.
Other Alternatives of investing in cryptocurrency in India
You don’t want to buy a cryptocurrency? But you want to invest in it? You can opt for other options to invest in Cryptocurrency in India. They are less risky and do not need in-depth knowledge of the crypto world.
Invest in cryptocurrency companies
If you do not wish to invest directly in crypto, you can invest in companies running around the crypto world. They can have partial or complete focus on the crypto market. Such companies include crypto mining companies, crypto hardware companies, companies that support crypto trade, etc.
You can also invest in companies that hold a large number of crypto coins on their balance sheets.
Invest in crypto-focused funds
If cryptocurrency companies don’t seem like a good option for you, you can invest in crypto-focused funds. You can choose among exchange-traded funds (ETFs) like futures funds and index funds. A variety of cryptocurrency investment trusts are also available.
Some crypto-based funds invest directly in them. While some funds make indirect investments through derivative securities such as futures contracts or investing in crypto-based companies. This is a safe and secure option to invest in Cryptocurrency in India.
Invest in a cryptocurrency IRA
By investing in IRA ( individual retirement account) you can make an investment and also gain the tax advantages of an IRA. Crypto IRA services can ensure more secure storage for your crypto savings.
Become a crypto miner or validator
This is the best way to invest directly in crypto. Crypto miners mine crypto on the network and they earn crypto as a reward. Validators also get cryptos in rewards. Minera and validators can either hold the reward as investment or exchange it for other currency.
In the following ways you can learn to invest in Cryptocurrency in India. But crypto is a volatile market. So be careful while investing in it. You must understand its complexity before investing an amount.
