05 May

Is It Legal to Buy Bitcoin in India?

May 5, 2021

Because of critical factors such as inherent security, no transaction fees, lack of banking system interference, cryptocurrency bitcoin is gaining traction in India. Currently, the bitcoin price in India is over 4.5 million rupees for one bitcoin.

The Indian government’s stance on Bitcoin

Although there is no lawful backing for cryptocurrencies, which include Bitcoin in India, it is becoming popular in the country. However, the RBI advises that every entity regulated by it must not deal with digital currencies or provide services for the facilitation of any person or entity when it comes to dealing and selling them. But in negation to this, the Supreme Court set aside the RBI ruling last year.

Since then, Bitcoin has been the most talked-about investment option. But there is a fear that the government may eventually ban digital currencies from being traded. Currently, the government is not considering cryptocurrencies as legal tender.

Is it safe to invest in cryptocurrency in India?

According to experts, Bitcoin is a new and alternative asset class. It has been around for almost ten years and withstood two major global recessions. Comparable to gold, cryptocurrencies are seen as a hedge to shield portfolios, and their value as a hedge lies in their inflation-resistant qualities. Traditionally, investors utilize gold to hedge against the volatility of stocks. But currently, crypto is slowly becoming a mainstream investment class, especially among young people.

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Additionally, purchasing this coin is absolutely legal in India, and currently, there is no law that prohibits Indians from purchasing and selling cryptocurrencies. Although it is true that it is not illegal to purchase crypto occurrences in India, there is no guarantee of safety of the invested amount compared to regular investments. Other jeopardies to which cryptocurrencies may be vulnerable include storage in an electronic or digital format which makes them vulnerable to the risks of hacking, malware attacks, as well as loss of password. It may result in a permanent loss of funds for users.

Because these transactions are taking place online and are encrypted, they are vulnerable to illegal and subversive acts such as terror funding, smuggling, as well as drug trafficking. In these acts, users have limited knowledge and may or may not even know about them since transactions are entirely encrypted. Experts believe that cryptocurrency will go mainstream over the next several months at a faster rate with more retail investors and first-time buyers entering the market.

Should you invest in Bitcoin despite the risks?

If you want to start investing in cryptocurrency such as Bitcoin despite the risks, experts suggest that as a first-timer in crypto, the most critical thing you should think about is that crypto is a high-risk venture, but it also has high rewards. Because of this, you must invest based on your risk for appetite. After doing diligent research on cryptocurrencies, it is also critical to utilize legitimate exchanges that follow KYC and AML rules and regulations. Compared to other industries, it is critical to steer clear of quick rich scams or people who promise to make the invested amount double.

Is it worth investing in Bitcoin? What experts have to say

Gone are the early days of Bitcoin when you can purchase for less than $1000. With this in mind, along with the risks involved, you may wonder if it is too late to invest in it. If you believe in the premise of Bitcoin, there is still a good reason to consider it but be cautious about how much of your portfolio you will be devoting. It might be worth making an investment in Bitcoin if it fits your goals. Plus, if you think it will gain future ground due to the production limits, it might be worth investing in. Right now, the Bitcoin price in India is over 4.5 million rupees for one Bitcoin.

What type of investor is a good fit for bitcoin?

Bitcoin makes sense if you desire a bit of diversity in your portfolio. Cryptocurrencies such as Bitcoin provide alternatives to common assets. It can be helpful if you want to have a few assets that aren’t denominated in the dollar or other local currency. It is a method to hold some assets away from the dollar.

If you feel like Bitcoin is a good strategy for your portfolio, it is agreed upon by experts that it should not be the primary focus of your investment tactic. Consider how much risk you can tolerate and whether you find it comfortable losing the amount of money invested in your portfolio for Bitcoin.

Why are cryptocurrencies becoming popular in India?

Experts say that Bitcoin has generated curiosity among millennials in India. The support to the cryptocurrency usage of IAMAI has also been a critical factor in securing its popularity. It is further said that the startup sector in India favors cryptocurrencies since it helps facilitate cross-border transactions with minimal effort. It provides numerous opportunities to small and medium-sized enterprises to expand their presence worldwide.

By Taylor Wilman

 


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