Are you a stock market veteran well-versed with the moves, the rules, the chart, and the art of stock trading? But a new asset class, “crypto,” has grabbed your attention. You see many young investors making some serious money in the crypto world. And thus, the veteran in stocks is now an eager newbie looking to buy Bitcoin in India?
If so, you are in the right place. In today’s post, you will see how crypto is quite similar yet so different from stocks. Crypto has its own challenges and rewards. Take in this information and then decide for yourself how you wish to put your money to work.
Why Crypto?
The oldest form of cryptocurrency is Bitcoin, created in 2009 as an alternative to government-backed currencies. Bitcoin stores value, just like gold. It is therefore called “digital gold,” used as a hedge against inflation. Bitcoin grabbed the attention of investors as it surged tenfold in three years, a return no bank or stock can give.
The rising popularity of Bitcoin in India compares to that of gold. The rate of the popular crypto coins has surged significantly over the last 12 months. As of June 11, 1 BTC to INR is ₹2,731,544, and 1 ETH to INR is ₹180,300.
Such a strong return is why one invests in crypto. But with great returns comes great risk.
How to Buy Bitcoin in India?
As a newbie, you might get intimidated hearing all the tech that is needed to buy Bitcoin in India. Guess what? That was a long time ago. Technology has evolved over the years. Today, trading in crypto is as easy as trading in stocks, thanks to crypto exchanges.
Most of these steps to be followed are similar to stock trading:
- First, select a reputed Indian crypto exchange of your choice. ZebPay is a crypto exchange that allows you to trade in Bitcoin just like you trade in stocks. You can use ZebPay on your computer or download the app on your smartphone.
- Second, create an account and complete the KYC, just like your stock trading platform. You have to upload and verify your PAN card and bank account details to start trading in Bitcoin.
- Third, link your bank details to the app and add money to the exchange to buy Bitcoin or any other cryptocurrency.
You can deposit Indian currency and buy crypto, store it in your ZebPay wallet, and sell it when the price reaches your expectation. Just like you pay a fee for stock trading, you pay fees for crypto trading, too.
Now, that takes care of the technical side of things you need to know to buy Bitcoin instantly in India. How is this new asset class different from the traditional stock market?
Trading: Bitcoin versus Stocks
Unlike stocks that only trade during trading days from 9 AM to 4 PM, crypto trading happens 24/7. You can trade whenever you have free time!
Unlike stocks where you have to buy a minimum of one share, you can buy fractional shares of Bitcoins via an exchange. ZebPay allows you to invest as little as ₹100, so you need not worry about the 1 BTC to INR rate that goes to an eight-figure amount.
How decentralization sets crypto apart from all asset classes
Bitcoin is the world’s first decentralized digital currency not controlled by any centralized organization, authority, or individual. This decentralization of transactions is the major difference between crypto and stocks. What does this mean?
Every bank or financial institution in this world operates on centralized servers. The central authority verifies every transaction, which gives them access to all your confidential financial data. If someone hacks the central server, your data is compromised, and you risk losing your money.
But Bitcoin eliminates this risk by decentralizing the transaction using Blockchain technology. When a peer sends or receives payments to another, every computer connected to the Blockchain network verifies the transaction. It is difficult to hack an entire network, making Blockchain the safest and most secure way to send and receive funds.
As Bitcoin transactions are between two peers with zero involvement of a third party, the price of Bitcoin is determined by demand and supply. The crypto exchange is just a medium of transaction, and you pay trading fees for it.
Cryptos have different risks compared to stocks
Cryptos have a different risk profile as compared to stocks, as outlined below:
- Inherent value: Stocks have an inherent value. They give dividends. You can estimate their price based on fundamentals like revenue and profit. These are reliable indicators that bring some predictability to stock. But cryptos have no inherent value.
- Regulation: Stocks are regulated. The regulator applies an upper and a lower circuit whenever the stock price moves significantly (more than 20%). This way, it controls the stock price volatility to protect retail investors from market manipulation by “whales” (large investors that trade in bulk and have the power to move markets). But there is no regulation in crypto markets. A whale can easily manipulate crypto.
While the crypto risks are different, the ways to mitigate them are similar to stock trading.
Volatility is a risk and an opportunity in the crypto market. You can take advantage of this volatility in the same way as you do in stocks. A Systematic Investment Plan (SIP) in Bitcoin can help you take advantage of dollar-cost averaging, thereby reducing the risk of buying bulk quantities at peak prices.
Crypto trading is susceptible to other risks, but so is stock trading. For instance, a cryptocurrency can be discontinued, but even a company whose stock you hold can go bankrupt.
Is Crypto the Future of Investment?
Crypto is still a new asset class, but it is evolving at a rapid pace. Do you know stock trading in India dates back 1 BTC to INR
to 1875? After 145 years, stock trading has become highly regulated and sophisticated. There are several ways to invest in stocks; through an IPO, on the exchange, through mutual funds and ETFs, or futures and options.
Crypto is at an early stage of regulation. There are regular instances of the RBI and the finance ministry warning about the risk of investing in crypto. But the fact is it is not illegal to buy and sell Bitcoin in India. Whatever money you earn from crypto trading is legal and taxable in India. Moreover, Bitcoin exchanges like ZebPay are legal entities.
What Lies Ahead?
Bitcoin and crypto prices will increase as they gain acceptance from more people. Large hedge funds and multinationals worldwide are coming to accept crypto as an alternative investment. Only time will tell what the future holds for crypto, but it has the potential to become the future investment of choice.
If you are looking for the best site to buy Bitcoin in India, ZebPay is the place. You can create an account, complete the KYC, link your bank account, and trade your first Bitcoin for just ₹100.
Reference links:
https://www.bitdegree.org/crypto/tutorials/centralized-vs-decentralised
https://zebpay.com/in/learn/understanding-the-risks/
