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How to buy cryptocurrency – Forbes Advisor INDIA
If you are new to the world of cryptocurrencies, find out how to buy Bitcoin, Dogemoneta, EthereumAND other cryptocurrencies It can be confusing at first.
Luckily, it’s quite simple to learn the ropes. Follow these five simple steps to start investing in cryptocurrency.
Remember: investing in cryptocurrencies is purely speculative and your capital is at risk. You may lose some or all of your money.
Furthermore, cryptocurrency trading is largely unregulated in India and if something goes wrong, for example if a company goes bankrupt, you will have no recourse for any compensation.
1. Choose a cryptocurrency broker or exchange
To buy cryptocurrency, you first need to choose a cryptocurrency broker or exchange. While both allow you to purchase cryptocurrencies, there are key differences between them.
What is a cryptocurrency exchange?
A cryptocurrency exchange it is a platform where buyers and sellers meet to trade cryptocurrencies. Exchanges often have relatively low fees, but tend to have more complex interfaces with more trade types and advanced performance charts, which can make them intimidating for new cryptocurrency investors.
Some of the best-known cryptocurrency exchanges are WazirXCoinDCX, Zebpay and Mudrex. Although the standard trading interfaces of these companies can overwhelm beginners, especially those with no experience stock tradingthey also offer easy and intuitive purchasing options.
Featured partners
Inheritance
Over 1 million investors trust Mudrex for their cryptocurrency investments
Safety
Mudrex is the Indian government. Recognized platform with 100% insured deposits stored in encrypted wallets
Commissions
Enjoy zero cryptocurrency deposit fees and the best rates in the industry.
Award-winning broker
Listed in Deloitte Fast 50 Index, Best Global FX Broker of 2022 – ForexExpo Dubai October 2022 & more
Best-in-Class for investment offerings
Trade over 26,000 assets with no minimum deposit
Customer care
Dedicated 24/7 support and easy registration
We invite you to invest carefully, your capital is at risk
However, the convenience comes at a cost, as beginner-friendly options cost substantially more than it would cost to purchase the same cryptocurrency through each platform’s standard trading interface. To save costs, you might aim to learn enough to use standard trading platforms before making your first cryptocurrency purchase, or not long after.
An important note: As someone new to the world of cryptocurrencies, you will want to make sure that your favorite exchange or brokerage allows transfers and purchases of fiat currency (such as pounds and INR) made with pounds. Some exchanges only allow you to purchase cryptocurrencies using another cryptocurrency, meaning you would have to find another exchange to purchase tokens accepted by your preferred exchange before you can start trading cryptocurrencies on that platform.
Related: Best Cryptocurrency Exchanges in India
What is a cryptocurrency broker?
Cryptocurrency brokers take the complexity out of buying cryptocurrencies, offering easy-to-use interfaces that interact with exchanges for you. Some charge higher fees than exchanges. Others claim to be “free” while making money by selling information about what you and other traders are buying and selling to large brokerages or funds or by not executing your trade at the best possible market price.
While they are undeniably convenient, you need to be careful with brokers because you may not be allowed to move your cryptocurrency holdings off the platform. With some, for example, you cannot transfer your cryptocurrency holdings from your account.
This may not seem like a big deal, but advanced cryptocurrency investors prefer to keep their coins in crypto wallets for added security. Some even choose hardware Crypto wallets that are not connected to the Internet for even greater security.
2. Create and verify your account
Once you have decided on a cryptocurrency broker or exchange, you can sign up to open an account. Depending on the platform and the amount you plan to purchase, you may need to verify your identity. This is an essential step to prevent fraud and meet regulatory requirements.
You may be able to buy or sell cryptocurrency only after completing the verification process. The platforms may ask you to submit a copy of your Aadhaar or PAN card and you may also be asked to upload a selfie to prove that your appearance matches the documents submitted.
3. Deposit cash to invest
To buy cryptocurrencies, you need to make sure you have funds in your account. You could deposit money into your crypto account by linking your bank account or paying with a debit card.
4. Place your cryptocurrency order
Once the money is in your account, you are ready to place your first cryptocurrency order. There are hundreds of cryptocurrencies, ranging from well-known names such as Bitcoin AND Ethereum to more obscure cryptocurrencies like Theta Fuel or Holo.
When deciding which cryptocurrency to buy, you can enter its ticker symbol (Bitcoin, for example, is BTC) and how many coins you want to buy. With most exchanges and brokers, you can buy fractional cryptocurrency shares, allowing you to purchase a sliver of expensive tokens like Bitcoin or Ethereum that would otherwise require thousands of rupees to own.
5. Select a storage method
The Reserve Bank of India does not support cryptocurrency exchanges and they are at risk of theft or hacking. You may also lose your investment if you forget the codes to access your account. This is why it is essential to have a secure storage location for your cryptocurrencies.
As noted above, if you purchase cryptocurrency through a broker, you may have little or no choice in how your cryptocurrency is stored. If you buy cryptocurrency through an exchange, you have more options:
- Leave the cryptocurrency in the exchange. When you purchase cryptocurrency, it is typically stored in a crypto wallet connected to the exchange. If you don’t like the provider you have exchange partners with or want to move it to a safer location, you could move it from the exchange to a separate hot or cold wallet. Depending on the exchange and the size of the transfer, you may have to pay a small fee to do so.
- Hot wallets are Crypto wallets stored online and run on Internet-connected devices, such as tablets, computers, or phones. They are convenient, but the risk of theft is higher since they are still connected to the Internet.
- Cool wallets. Cold crypto wallets are not connected to the internet, making them the safest option for holding cryptocurrency. They take the form of external devices, such as a USB or hard drive. You have to be careful with cold wallets, though: if you lose the key code associated with them or the device fails, you may never be able to recover your cryptocurrency. While the same might happen with specific hot wallets, some are operated by custodians who can help you get back into your account if you get stuck.
Steps to buy cryptocurrency in India
Let’s see some general steps to buy cryptocurrency in India:
Step 1: Sign up on your desired crypto exchange platform.
Step 2: Set up your account security by verifying your email address.
Step 3: Complete the Know Your Customer (KYC) process.
Step 4: Add funds to your cryptocurrency exchange wallet.
Step 5: Finally, purchase the cryptocurrency you want.
Alternative ways to buy cryptocurrency
While purchasing cryptocurrency is a significant trend, it is a volatile and risky investment choice. If investing in cryptocurrencies on an exchange or through a broker doesn’t seem like the right choice for you, here are some options for investing indirectly in Bitcoin and other cryptocurrencies:
1. Wait for Crypto Exchange-Traded Funds (ETFs)
Exchange-traded funds are popular investments that allow you to gain exposure to hundreds of individual holdings in one fell swoop. This means they provide immediate diversification and are less risky than selecting individual investments.
There is a huge appetite for cryptocurrency ETFs, which allow investors to invest in many cryptocurrencies at once. Indian investors need to open a global account or invest through brokerage platforms from an RBI approved channel. To invest in cryptocurrency ETFs overseas, investors must transfer money using the Liberalized Remittance Scheme.
2. Invest in cryptocurrency-related companies
If you prefer to invest in companies with tangible products or services that are subject to regulatory oversight, but still want to expose yourself to the cryptocurrency market, you can purchase shares of companies that use or own cryptocurrencies and blockchain that feeds them. You will need an online brokerage account to buy shares of publicly traded companies such as:
- Nvidia (NVDA) is a technology company that designs and sells graphics processing units, which are the heart of the systems used to mine cryptocurrency.
- Block, Inc. (m2), a small business payment services provider, has purchased millions of dollars worth of Bitcoin since October 2020. In February 2021, the company revealed that Bitcoin made up about 5% of the liquidity on its balance sheet. Additionally, SQ’s Cash App allows people to buy, sell, and store cryptocurrency.
Featured partners
Inheritance
Over 1 million investors trust Mudrex for their cryptocurrency investments
Safety
Mudrex is the Indian government. Recognized platform with 100% insured deposits stored in encrypted wallets
Commissions
Enjoy zero cryptocurrency deposit fees and the best rates in the industry.
Award-winning broker
Listed in Deloitte Fast 50 Index, Best Global FX Broker of 2022 – ForexExpo Dubai October 2022 & more
Best-in-Class for investment offerings
Trade over 26,000 assets with no minimum deposit
Customer care
Dedicated 24/7 support and easy registration
We invite you to invest carefully, your capital is at risk
As with any investment, consider your goals and current financial situation before investing in cryptocurrency or individual companies that have a large stake in it. Cryptocurrency can be extremely volatile – a single tweet can cause its price to plummet – and is still a very speculative investment. This means that you should invest carefully and cautiously.