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Is Cryptocurrency Good for the Common Man? Should I Buy Crypto?

Is Cryptocurrency Good for the Common Man? Should I Buy Crypto?

  • By Saral Credit
  • December 01, 2021

Cryptocurrency is the new investment option for many investors.

Most of the youth are fascinated with the booming cryptocurrency trend in the digital world.

Today, Bitcoin and Ethereum are the two prominent cryptocurrencies in huge demand and have changed the way people invest in cryptocurrencies. Since its introduction in the digital world, top cryptocurrencies have bestowed jaw-dropping returns, and that's one strong reason that influenced investors to change their investing structure.

Since Satoshi Nakamoto introduced Bitcoin, its price has increased by multiple folds (more than ten times its face value), turning numerous investors into millionaires.

However, it's interesting that not every first-time investor is entirely aware of crypto in India. So, below are five points that every first-time investor should know about the crypto market in India.

1. Investing in Crypto isn't Illegal:

The biggest myth with crypto investment in India is that it's illegal to hold or trade cryptocurrency. Interestingly, back in 2018, RBI restricted Indian banks from facilitating crypto transactions. However, numerous petitions were filed to challenge the ban.

Today, many big fishes have made a significant investment in the crypto world, holding a large chunk of popular or potential cryptocurrencies. With this, new investors are also increasingly taking advantage of numerous market dips and making money from virtual currency.

As per the present scenario, the Indian government is set to discuss new rules and laws to control cryptocurrency transactions in India. Some crypto may become illegal, while some will be allowed for holding/trading. Hence, this has created chaos in the investor's community, who are eagerly and aggressively putting their hard-earned money into cryptocurrency.

2. Profit from Cryptocurrency is Taxable:

Everyone already knows that cryptocurrency is decentralized where no regular body (middle man) controls the entire system. However, this doesn't mean crypto is free from taxes. Instead, any sort of profit credited to your account is considered an income source (under Other Sources), and hence you are liable to pay relevant taxes (if any).

Like Mutual Funds and Stocks, you are liable to pay STCG (Short Term Capital Gains) and LTCG (Long Term Capital Gains) on the profit you earn from cryptocurrency.

3. Cryptocurrencies are Affordable:

It's a common phenomenon that when you say cryptocurrency, people will only have one word in mind, i.e., Bitcoin. Currently, Bitcoin has a whooping price hike which has made it a costly investment for first-time investors.

However, you will be amazed to know that thousands of cryptocurrencies are introduced in the virtual world to invest in and make money. At the initial level, these cryptos will cost you equivalent to a few paise which can go higher in the future, based on its demand and market volatility.

There are numerous crypto exchange platforms available in India where you can track the ongoing price of various cryptocurrencies and choose the potential ones that assure you a profit in the future. However, you should always note that the crypto industry is a highly volatile and risky market. You should stay aware every minute to make money or maintain your investment.

4. The Value of Crypto has Existence as Real Currency:

The biggest question many people ask before investing in crypto is whether it has any existence in the real world or not? Interestingly, people are getting educated about virtual currency, and hence today, it has its importance as equal as real currency.

It holds the same value as a real Indian Rupee. However, its virtual-only existence has frightened many newbie investors to get into this market. The existence of the real currency is only because human beings believe in those currencies. Without belief, it's hard to introduce a new currency and continue to use it for daily transactions. Simultaneously, big investors strongly support the concept of virtual currency and hence made its presence in the real world.

5. Cryptocurrency Investment is Simple & Easy:

Today, everything has gone digital and virtual currency has its presence at the digital level. Past few years, it was tough for cryptocurrency investors to put their money in various cryptocurrencies. However, the concept has completely changed with the introduction of numerous crypto exchange platforms.

Numerous crypto exchanges are permitted to allow investors in India to buy or trade-in cryptocurrency.

With as small as INR 100, you can start your crypto investment journey and hence add some amazing coins to your portfolio. Furthermore, RBI has ruled out its crypto ban, making it a good investment option alongside stocks, mutual funds, real estate, and a few more.

With that said, many of you are now educated enough about the potential of cryptocurrency. However, the biggest query is whether you should put your hard-earned money in crypto or not. In short, whether you should buy crypto or not. Below are some pointers that make the outcome transparent and help you make the right decision.

Why Should You Invest in Cryptocurrency?

It's the Starting of Cryptocurrency: You are wrong if you think that you are too late in crypto investing. The cryptocurrency market has evolved in the last few years, and since then, it has been booming at an aggressive level. If you are planning to start your crypto investment journey, you should not invest only because of FOMO (Fear of Missing Out). Instead, you should invest in making money and holding it for long.

Crypto Bubble has Already Burst: In the last few years, Bitcoin prices have already touched their best high value and afterward experienced a sharp dip. On a similar note, numerous ALT coins were also introduced in the market with repetitive corrections on a timely basis.

Today, many experts believe the Q4 of 2017 when the crypto bubble burst, creating a new way for investors to think before investing in cryptocurrency.

Blockchain Technology will Stay For Long: If you are planning to invest in cryptocurrency, you are already familiar with the blockchain concept. Blockchain is a high-potential technology that can be used for numerous applications across the globe. Numerous businesses have already introduced blockchain technology in their operations, and many have streamlined it for the future.

With tons of real-world applications of blockchain, it has become a prominent technology for the digital world.

Trading is Possible to Make Profit: Crypto trading is nothing new to you if you are in the stock market and have sound intraday trading experience. Working on the same concepts, charts, predictions, etc., you can start making a profit by buying at low and selling at high.

With time, you can understand the risk factor in crypto trading and act accordingly to make a significant profit in your day-to-day investments.

Only Strong & Potential Cryptocurrencies are Available: Post-2017 bull run in the crypto world, multiple corrections were made; hence, we are left with quality ALT coins today. You can find tons of cryptocurrencies to invest in, but you also get detailed information about every crypto before investing.

Tons of Information is Available: If you plan to try your hands in cryptocurrency, you can take advantage of the internet to enhance your knowledge and become a crypto investing expert. Yes! Today, numerous investors, crypto experts have made it possible to learn crypto investing from scratch and choose the right virtual currency for long/short term investment.

Buying Cryptocurrency is Easy: The biggest advantage of the current era is that buying and selling cryptocurrency is now smooth and easy. With numerous crypto exchange platforms, you can invest in cryptocurrency hassle-free.

Why Shouldn't You Invest in Crypto?

Knowing the cons of crypto investing will clear the picture and help you in better decision-making.

No Regulatory Bodies: Everyone knows that it is easy to trust and rely on authenticity if the regulatory body controls a process. However, cryptocurrencies don't have any regulatory bodies, which makes them highly risky.

No Government Laws: Currently, limited countries have started crypto transactions for various operations. However, the entire world is still looking for an excellent opportunity to integrate cryptocurrency into the real world.

Risk of Fraud: There is no legal process in case you face crypto fraud. As it is completely decentralized, it becomes tough to skip fraud or take legal action in case of any fraud.

Crypto Growth is Unpredictable: The price of stocks is entirely dependent on the growth of a business. However, cryptocurrency has no such base for its price hike or dip. Instead, it is somewhere related to the big investors who create a hype to increase its price and sell the coins to decrease its value.

Anyone can Create Cryptocurrency: The reason behind numerous cryptocurrencies in the exchange platform is that anyone can create a cryptocurrency that can get the hype. Many cryptocurrencies cases were witnessed in the past where creators moved out with entire investments made by the investors.

With that said, you are all set to decide whether you should start investing in crypto or not. If you are a first-time buyer, it's strongly recommended to start small.

You should always start with the investment amount that you are not afraid of in case of 100% loss.

Disclaimer: Investing in cryptocurrency is highly volatile, highly risky. However, it also gives you high returns.