Buying Cryptocurrencies In India: All You Need To Know

Buying Cryptocurrencies In India: All You Need To Know
Buying Cryptocurrencies In India: All You Need To Know

This post was most recently updated on March 31st, 2022

Cryptocurrency is in the news for many reasons. Despite being just a decade old, it has been trending for a few years, with names like Bitcoin, Ethereum, and Dogecoin being the buzzwords. It is not only the seasoned investors who are attracted to this, but also novices as it is a quick way to make some profits

. However, unlike the stock market, the crypto market is not regularized, due to which there are many risks involved. Given that it is a highly volatile market, knowing everything before you start investing is essential. Read below to learn the important things to consider. 

Cryptocurrencies are Decentralized

Crypto is a digital asset, which means it is not a physical currency like the Indian Rupee. For example, if you invest in Bitcoin, you cannot see it physically or hold it in your hands. Also, no central authority regulates the value of this currency. Which means the government or the banks do not have any control over it.

These agencies do not know how they are made, the value, or how it is exchanged. It is distributed via the internet across a number of computers. The distributed networks are based on blockchain technology which is a way to ensure the transactional data’s integrity. The transactions use cryptography and blockchain technology so only the sender and the receiver of the message can see the contents. 

How to Buy A Cryptocurrency?

It can be brought using a crypto exchange. It is a platform where buyers and sellers can trade these currencies. Also, these exchanges support many currencies, from popular ones like Ripple, Etherum, Bitcoin to the newest. There are many crypto exchanges in India, and it is recommended that you look them up thoroughly before investing. Look for exchanges that are reputed and have offices in India.

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Whatever choice you make, all exchanges have a similar process for creating accounts. KYC needs to be submitted, and once this is verified, the account can be created. The process is quick, and you can start trading by linking your crypto account and the bank account. Once this process is completed, you can place your orders. For example, if you want to buy a ripple. Check ripple to INR price, enter the symbol of currency you want to buy and the value to purchase, and place your order. 

There are other ways to trade crypto, too, like dealing directly. But in an exchange, you can get a stable price, security, and easing trading options, especially for beginners. 

Storing Your Cryptocurrency

Buying crypto is only the first step. You also need to store the coins since the market is highly volatile. If you look at the price charts, you can see Ethereum price INR variations, and those who have held it for the long run have made profits. The same with other coins like Bitcoin, they are stored in a crypto wallet safely for a long time. You can choose various types of wallets based on how you want to use the coins. 

Gains are Taxed

Although the online currencies are unregulated, the gain made from them comes under the capital gains tax as per the Indian IT Act. Depending on the duration of your holding, the gains are classified. The details of this can be filled under other income or business income. 

Despite being unregulated in India, adding cryptocurrencies to your portfolio is a good way to balance it through diversification. Despite its volatility, it gives you a chance to maximize your portfolio’s worth.