What is this new-fangled currency all about? You must have heard of cryptocurrency by now, and you may even have been exposed to cryptocurrency disadvantages, but a lack of knowledge should not dissuade you from investing in this new kind of financial product. Hence, you need to know about it and how to invest in it in India.
Cryptocurrency is technically just digital money. This kind of currency is built on the technology of blockchain systems. In other words, cryptocurrency is enabled by blockchain technology. Considered secure due to the fact that it establishes an equal consensus among parties that are untrustworthy, blockchains are similar to old ledgers that bookkeepers used to use. In this case, the ledger is an electronic one and all those who have access to this ledger can be bookkeepers of it. Investment in cryptocurrency in India has followed suit of the global trend of investment in digital currency with Bitcoin being the most famous currency in existence. Cryptocurrency in India for beginners is proving to be one of the most exciting asset classes to invest in, but since it is relatively new, you must invest with care.
When you consider an investment in Cryptocurrency, you may wish to buy and hold a single crypto coin, or more than one. The most common way to purchase cryptocurrency is buying it directly from what is called a crypto exchange. This has proved to be an easy way to purchase and sell cryptocurrency. A crypto exchange is technically a platform to trade on in cryptocurrency. Such platforms constitute 100% digital operations and are self-regulated. They work through 24 hours of any given day, so you are permitted to carry on trades at any time you wish. This is the advantage of crypto trading compared to other financial markets. In India, one of the top crypto trading platforms is owned by Binance, called WazirX. Although cryptocurrency is secured by means of cryptography and is prevented from any counterfeit activity, cryptocurrency prices may show some volatility in their values, just like normal currencies do.
You may want to invest in crypto currency directly through the route of a crypto exchange. Here, you have a choice of buying any cryptocurrency that exchanges offer, from popular ones like Bitcoin and Ethereum to lesser known ones. You may even get offers to purchase unknown and new cryptocurrency through an ‘ICO’ or initial coin offering, much like an IPO for investing in stock of a new company getting listed. This offers you the chance to invest in a nascent coin, which may be held for long-term growth. Additionally, you can also invest in companies that have a complete involvement, or at least, a partial involvement, with cryptocurrency. These are companies such as PayPal Holdings Inc. that give support to cryptocurrency. Ultimately, other ways to invest in crypto are via funds and futures contracts in cryptocurrency.
You can find out more about cryptocurrency investment in India through prominent brokers like Motilal Oswal. Besides cryptocurrency, you can open a Demat account and find an array of investment products from stocks and mutual funds to commodities to invest in with a reliable broker who is ready to help you invest.
This article is mainly for educational purposes and is not a source of advice for investment in cryptocurrency. It is wise if you secure your financial portfolio with more safe and regulated investments like fixed deposits, liquid funds, mutual funds, stocks, etc.
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