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Bitcoin in India

Bitcoin is a form of cryptocurrency that is used to perform transactions online. (Photo: Pixabay)

Bitcoin: Cryptocurrency gung-ho and investment in India

Bitcoin is a new investment option, and its meteoric rise has attracted many investors in India. Earlier, mostly millennials were seen interested in crypto. But now, people across all age and income groups are curious about cryptocurrencies. To some extent, the credit of its popularity also goes to Tesla and SpaceX CEO Elon Musk who keeps tweeting about Bitcoin. But like any other investment option, it is very important to understand what Bitcoin is and the risks associated with it. Well, if you do understand cryptocurrency then you must be aware of its volatility, but if you are first-time investors, just don’t enter the crypto world for the sake of FOMO syndrome (Fear-Of-Missing-Out).

What investors must know before investing in Bitcoin

What is Bitcoin?

Bitcoin is a form of cryptocurrency that is used to perform transactions online just like your credit card. The only difference is that it is virtual. It has been over a decade since Satoshi Nakamoto created Bitcoin.

What is Cryptocurrency?

Cryptocurrency are digital currencies, which use strong cryptography to secure online transactions. Please don’t confuse it with a currency, it’s more like an asset like gold or real estate. You cannot buy any item, say a laptop, or a TV with crypto.

Types of cryptocurrencies

There are various types of cryptocurrencies, such as Bitcoin, Etherium, Stellar, Ripple and many more.

Why are cryptocurrencies so volatile?

Unlike the stock markets which are open for trading for 6-7 hours a day, a crypto market never sleeps. It is open 24/7. Besides, it’s a global market.

What is the process to open an account with crypto exchange?

You have to follow the know-your-customer (KYC) process while opening an account. Most exchanges require your Permanent Account Number (PAN) card and identity proof. Some exchanges give approvals instantly. Others take up to a week to complete the KYC process.

How do I transfer amounts for investing in cryptocurrency?

To buy a crypto coin, you first need to transfer money to a wallet that belongs to your exchange. Then, you can buy a coin. Whenever you sell your crypto, you can use the same routes to transfer money back to your bank account.

Should you invest in Bitcoin?

Financial experts advise first-time investors to spend time and effort understanding more about Bitcoin before investing. If they choose to invest they should put in small amounts, as low as Rs100, to try it out. They also advise retail investors to avoid Bitcoin. As per them investing in Bitcoin is just like gambling.

Is it legal to buy Bitcoin in India?

In 2018, the Reserve Bank of India (RBI) issued a circular banning cryptocurrency trading in India. It directed all legal entities regulated by the RBI to not deal in virtual currencies or provide services to any individuals or businesses dealing in cryptocurrencies. Later in the year, the Supreme Court also backed this decision. However, last year, the SC overturned the ban.

What documents do you need to buy Bitcoin?

  • Aadhaar card
  • PAN card
  • Bank account in your name
  • Email address
  • Phone number

What is the minimum Bitcoin amount that you can buy?

One Bitcoin is currently worth nearly Rs 26 lakh, according to Morningstar Ratings Agency. but you don’t need to buy a whole bitcoin in the beginning. You can start with as low as Rs 500 and buy a tiny portion of the digital money.

Also Read: Have an inactive bank account? Know how to reactivate it