Table of Contents
Note: This blog is written by an external blogger. The views and opinions expressed within this post belong solely to the author.
Is cryptocurrency a good investment? This is one of the most often asked questions concerning cryptocurrencies. Furthermore, there is a widespread belief that cryptocurrency is only for the rich. In this article, we will share how investors with less money can invest in cryptocurrency.
Why is it advantageous to invest in cryptocurrencies?
- Cryptocurrencies have revolutionized our world because of their decentralized structure. How? They have modified traditional financial institutions to the point of no return, allowing transactions across borders at nominal fees and short processing times.
- Cryptocurrency, like the Indian Rupee, has a monetary value. Unlike traditional money, cryptocurrencies are digital assets with no physical existence. Due to their intangible aspect, many people believe that cryptos have no actual value and are just a collection of codes. But the truth is that money only has value if its users believe in it.
- The cryptocurrency trading sector is characterized by high liquidity, suggesting that buying and selling cryptos is simple. Cryptocurrencies are being bought and traded by many entities, not just affluent individuals and influential organizations. Cryptocurrency trading is now relatively easy to do.
- Perhaps the most compelling reason for people to invest in cryptocurrencies is the prospect of profit. Although crypto trading is still somewhat new, it can offer higher returns than alternative investments like stocks. Cryptocurrencies are incredibly volatile; thus, a single trade could lead to a hefty profit.
- You have more freedom and flexibility with cryptocurrency. You wouldn’t have to bother about closing times because the crypto market is open 24 hours a day, seven days a week. You may trade whenever and however you choose.
- Investing in cryptocurrency is a fantastic way to diversify your portfolio. Investing in cryptocurrencies is a great way to establish yourself as a successful trader in today’s fast-paced, ever-changing financial market since cryptocurrency does not go in lockstep with assets like bonds and stocks.
- Many cryptocurrencies are based on blockchain technology, which is supposed to be difficult to attack for hackers. On the blockchain, transactions are encrypted, signed with a private key, and verified using a public key. Simultaneously, the technology allows for a high level of transparency, which is an important consideration when investing in cryptocurrencies.
- Investing in cryptocurrency is simple. In today’s tech-driven world, people from all walks of life can learn about cryptocurrencies. Online crypto courses and trading psychology books are up for grabs if you’re looking to learn crypto trading for free. The amount of trading data available nowadays is incredible. In addition, a growing number of websites and forums are giving beneficial cryptocurrency information as well as promptly identifying scams.
How can one invest in cryptocurrency in India with little money?
Not everyone has large sums of money sitting around to invest. Thankfully, crypto is an investment vehicle that anyone, including those with limited financial resources, may use. The notion that you need a lot of money to make money is a common misconception among new and inexperienced investors. Let us look at the steps how to:
1. Begin with a smaller scale.
Like the stock market, the crypto market is volatile, which means that asset prices will vary rapidly. Therefore, only invest in cryptocurrency after assuring that you have enough liquid funds, perhaps to sustain at least six months without taking on debt?
[wd_hustle id="4" type="embedded"/]2. Decide on which cryptocurrency to buy.
Yes, there are a variety of cryptocurrencies on the market. However, jumping on the bandwagon and investing in five different cryptocurrencies is not a good idea. You’ll need to conduct a vast amount of research to pick the right crypto coin. Keep an eye on the news, develop a list of the top five performing cryptocurrencies, and monitor their progress.
3. Choose the Most Reliable Cryptocurrency Exchange
Examine a complete list of the best cryptocurrency exchanges to buy cryptocurrency in India, including transaction costs, advantages, and disadvantages. These cryptocurrency exchanges are designed specifically to manage cryptocurrencies and their volatile nature, just like banks and other financial institutions are designed to lend, maintain, and provide mortgages.
WazirX is an Indian cryptocurrency exchange based in Mumbai that is one of the largest in the country. WazirX is a cryptocurrency with a utility token built-in (WRX). They feature a peer-to-peer (P2P) trading engine that links users to trade with each other. WazirX is an excellent choice to buy cryptocurrency in India.
4. Select a Cryptocurrency Wallet
A cryptocurrency wallet is a type of software that stores your private and public keys and connects you to the blockchain, that’s where your crypto assets are stored. Unfortunately, a lot of people confuse cryptocurrency wallets with cryptocurrency storage. They do, however, just let you use a crypto address referred to as ‘key’ to receive access to your cryptocurrency on the blockchain.
5. Rupee-cost averaging
Rupee-cost averaging is an investment approach that requires acquiring a specified amount of an asset or a portfolio of assets regularly to grow your investment over time. Rupee-cost averaging not only allows smaller investors to generate wealth but also “smooths” out market volatility by allowing individuals to buy cryptocurrency at the average price throughout their investment span.
Given Bitcoin’s potential for high returns, price volatility, and its possibility to be subdivided into one-millionth of a Bitcoin, it is ideal to invest in Bitcoin via rupee-cost averaging with small weekly or monthly investments. While no one can predict whether Bitcoin will match its stellar performance in the past, most Bitcoin experts believe the digital currency has a lot of room to flourish.
Conclusion
If you follow the methods above, you’ll be able to invest in cryptocurrencies with minimal money. However, prepare for some volatility, regardless of which cryptocurrency you choose, and keep a close eye on the market.
Further Reading:
How to Buy Cryptocurrencies in India?
How to Buy Bitcoin in India in 2021
Can you buy shares in Bitcoin?
What is Dogecoin? How to buy Dogecoin in India?
6 Things to Consider Before Investing in Bitcoin
8 Benefits Of Investing In Ripple (XRP)
Why Start-ups Should Consider Using Bitcoins
Frequently Asked Questions
Is Pi Cryptocurrency Safe?
Pi Network captured the crypto community’s interest even before it officially debuted. Its innovative mobile mining approach and user-friendly design simplify crypto adoption for a broader audience. Some users see this as a chance to get engaged in the crypto from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
What Is Virtual Currency?
Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.
What Is The Meaning Of Crypto?
A cryptocurrency is a digital currency that is secured by the process of cryptography, making counterfeiting and double-spending almost impossible to happen. Blockchain technology is used to produce cryptocurrencies ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a centralized authority does not issue them.
How Many Cryptocurrencies Are There?
There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.
What Are The Best Cryptocurrencies To Invest In?
The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.
Who Invented Cryptocurrency?
Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.
How Safe Are Cryptocurrencies?
Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed. There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.
Is Crypto Legal In India?
Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
