You can’t ignore it, whether you like it or not. The Bitcoin mania has swept the globe, with India being no exception. The Indian government’s position on digital assets was clarified in the last budget, making it less likely to be prohibited in the future. With many people generating huge profits from bitcoin trading, even a 30% tax does not appear to be a significant disincentive. Does this, however, imply that one should start investing right away?
Before investing any money, like with any other sort of investment, one must first comprehend what they are getting into. Before you start trading cryptocurrencies, keep the following guidelines in mind:
- Proceed with caution: The crypto market is just a decade old and is still in its infancy. As a result, it is far more volatile, and authorities have yet to regulate it. This makes it very impossible to recover funds in the event of fraud or hacking. Furthermore, it is relatively easy to create a cryptocurrency that appears to be authentic but is actually a hoax.
- Invest just what you can afford to lose: Invest in Fixed Deposits, Equity Mutual Money, Debt Funds, essential insurances, and emergency funds to ensure your long-term financial stability. If you still have money after this security, try investing in cryptocurrency because this is money you can afford to lose while being financially unaffected.
- 4Do your homework: It’s all too tempting to invest blindly based on recommendations from friends or acquaintances. However, keep in mind that this is your money, and no one will save you if the investment fails. As a consequence, before investing any cash, it is preferable to have a complete grasp of the cryptocurrency market. Learn about prominent cryptocurrencies such as Bitcoin, Ethereum, Tether, Polygon, and more. Learn about their use cases and prospects before making any investment decisions.
- Use a reputable exchange: Cryptocurrency exchanges are frequently hacked or used to defraud investors. Make sure you open an account with a big exchange that has a good track record and has insurance in case of a hack.
- 7Understand the technicalities: If you’re serious about cryptocurrency investing, you should learn how to establish your own digital wallets or buy a reputable hard wallet to protect your funds. To enhance your expertise, learn about liquidity mining, staking, decentralized money, and more.
Before you go into crypto investment, the first and most important step is to complete your homework. Many investors are afraid of missing out on large rewards, so they invest their money without hesitation. This is preventable since you are gambling with your hard-earned money. First, make sure you’re financially stable with other reliable and regulated instruments. Visit the Motilal Oswal website to learn more about online brokerage and to create a Demat account.