You may have heard about it from a distant cousin. A long-forgotten classmate from school would have Tweeted his experience online. Someone among your least-accessed WhatsApp groups of college acquaintances may have been chattering how he made a windfall. If you are between 18 and 45, chances are that someone you know has set aside a few bucks to deal in cryptocurrencies.
To your surprise, some of these folks may have as much to do with technology as night has to do with day. For some of you who are slightly more cued in would have read that Bitcoin touched $50,000 earlier this month. El Salvador just adopted bitcoin as a legal tender. It’s hardly surprising if you have an itch to get in on some of the action. But where and how should one get started?Pick an exchange that has “been there done that” and one you trust:
While buying a product from an e-commerce website or booking flight tickets, some shoppers prefer opening multiple tabs to compare prices. You usually buy from the cheapest operator. After all, it’s the same product listed across different sites. Indeed but that’s not recommended while trading in cryptocurrencies. Do not look for “the best rates” but go with a reputed crypto exchange. There are only a handful of them in India. For starters, ZebPay, among the oldest in the business, is a good bet. Over 4m users in India trade on the platform with volumes of over $1bn every month. Start your journey here.Don’t overcomplicate things:
Cryptocurrency, in itself, is a tough subject to get your head around. It’s easy to get assailed with too much information online. There may be many self-proclaimed experts on social media. It can, sometimes, get intimidating. But to begin with, keep it simple and get started by doing a bit of basic homework. Start small, if you wish. Remember you can buy even ten rupees worth of cryptocurrency on exchanges. Crypto never sleeps:
The first thing you will realise in the world of virtual currencies is that they do not take a break. Unlike stock markets around the world that have a fixed schedule beyond which investors can’t trade, cryptocurrencies and their exchanges run 24X7. It’s tempting to keep refreshing the app to check the worth of your investments time and again. You might wonder when the right time to invest is. To get around this, look for a service that allows you to invest in crypto via a Systematic Investment Plan (SIP) such that your investments are automated. ZEBB from ZebPay allows you to start an SIP for as little as 100 rupees.I’d like to get started but is it legal?
That’s the most frequently asked question. Yes, the system is legal in India. It is like any other asset such as gold. In no way would you be breaking any law by trading and dealing with cryptocurrencies. A cryptocurrency bill, too, has been proposed and will be introduced in the parliament shortly. Is it safe?
That’s the second-most frequently asked question and rightly so. It is no secret that cryptocurrency, as an asset class is mercurial and volatile. But how safe are they? Some readers may point you to the famous story of a man in Wales who was scouring a rubbish dump to look for a hard drive that contained 7,500 bitcoins that were accidentally binned. Their value had grown to some $7.5m. Can such mishaps occur? Well, previously techies would store digital currencies in physical wallets inside hard drives. Today, the risk is borne by the crypto exchanges where all you need to worry about is buying your share of the currencies on a few taps and let the exchange take care of the rest. Hence, the importance of picking the right cryptocurrency exchange cannot be overstated.
But what should be your investment philosophy? In which cryptocurrency should you invest your first buck? Whereas nobody can offer you trading advice without the massive asterix of “conditions apply”, we will, in the next article provide you with some basic guidelines on how to approach this hot new asset class.The pages slugged ‘Brand Connect’ are equivalent to advertisements and are not written and produced by Forbes India journalists.