7 min readInterest in cryptocurrency is growing rapidly among Indian investors. From Bitcoin and Ethereum to newer virtual digital assets, the crypto market presents exciting opportunities – but also significant risks. With the promise of high rewards comes the need for informed decision-making, legal awareness, and security.
This guide is designed for new users who want to start investing in crypto in India. It offers a practical, beginner-friendly explanation of the crypto landscape, including how to buy cryptocurrency, choose a secure platform, and understand the risks involved.
Is it worth investing in crypto?
Cryptocurrencies can be a high-risk, high-reward asset class. The crypto market is volatile, and prices can fluctuate rapidly based on short term market movements, global events, and speculation. However, some investors believe that crypto assets like Bitcoin and Ethereum have long-term potential due to growing adoption and blockchain innovation.
Before you start investing, assess your personal risk appetite and financial goals. If you are looking for fast gains, be aware that such transactions involve significant risks. If you’re more interested in long-term market understanding, crypto can be a part of a diversified portfolio.
Always conduct your own research. This article is for informational and awareness purposes only and does not constitute financial advice.
Investment strategies and crypto products
Indian investors can choose from a variety of crypto products and strategies:
- Buy and hold: Purchase crypto assets and store them in a secure wallet for the long term.
- Crypto trading: Actively buy and sell based on market trends, using a trading platform with advanced tools.
- Staking: Lock certain crypto tokens to earn rewards from blockchain networks.
- Lending: Lend your crypto and earn interest over time.
- Derivatives: Instruments like futures and options exist but are best suited for experienced traders due to their complexity and risk.
Each strategy comes with different levels of risk and potential reward.
Understanding crypto legalities
Cryptocurrencies are not legal tender in India, but they are not illegal either. The Reserve Bank of India (RBI) had previously restricted banks from dealing with crypto exchanges, but that ban was overturned by the Supreme Court in 2020. Since then, trading digital assets has continued within a grey regulatory area.
The Indian government does not ban crypto ownership, but it also does not offer full compliance or regulatory recourse in case of losses. Always use platforms that comply with FIU India registration and offer transparency, compliance, and user protection.
Taxation and accounting
Crypto earnings are taxed in India as per the Finance Act 2022:
- A flat 30% tax applies to gains from selling digital assets
- 1% TDS (Tax Deducted at Source) on every transaction
- No deductions are allowed except for the cost of acquisition
It’s important to keep records of all transactions for accounting and legal purposes. Losses arising from crypto cannot be offset against other income.
Choosing the right crypto exchange or broker
Not all exchanges are equal. Look for an Indian or global crypto app that offers:
- Regulatory compliance (registered with FIU India)
- User-friendly interface
- Low trading fees and deposit fees
- Security features like 2FA, cold wallets, and insurance for user assets
- Good customer support and educational resources
Compare Indian exchanges and international platforms based on trading volume, features, security, and reputation.
How to start investing in cryptocurrency in India
Starting your crypto journey is easier than ever. You can begin with just 100 Indian rupees. Here’s how to start:
- Do your own research on cryptocurrencies, platforms, and risks
- Choose a safe crypto trading platform like PrimeXBT
- Sign up and complete KYC to verify your identity
- Deposit funds using a bank transfer or other available method
- Buy cryptocurrency like Bitcoin or Ethereum
- Store in a secure wallet, such as a hardware wallet
Start small, stay informed, and never invest more than you can afford to lose.
How to buy crypto
Here’s a step-by-step process to make your first crypto purchases on PrimeXBT:
- Create an account on PrimeXBT
- Complete KYC verification for regulatory compliance
- Fund your account using Indian rupees via bank transfer
- Navigate to the crypto section of the platform
- Choose the asset (e.g., Bitcoin, Ethereum) you want to buy
- Enter the amount and confirm the transaction
- Transfer assets to an exchange wallet or hardware wallet for security
How to trade crypto
If you prefer short-term market movements, here’s how to trade crypto on PrimeXBT:
- Log in to your PrimeXBT account
- Access the trading platform and choose the crypto trading pair
- Use advanced tools to analyse the market
- Place your order (buy or sell)
- Monitor the trade within a single trading session or over time
- Exit the trade and review profits/losses
Note: Crypto trading involves significant risks. Trade responsibly.
Security and risk assessment
Security is essential in the world of digital assets. Here are tips for reducing hacking risks and protecting your investment:
- Use two-factor authentication (2FA)
- Keep your private keys offline in a hardware wallet
- Avoid keeping large amounts in an exchange wallet
- Choose platforms with a track record of user asset protection
- Be cautious of phishing scams and fake crypto apps
- Stay informed about market and regulatory changes
There is no regulatory recourse in most cases of theft or fraud, so prevention is key.
Conclusion
Crypto is an exciting frontier for Indian investors, but it’s not without risks. By choosing a compliant trading platform, understanding the legal environment, and protecting your assets, you can participate in the crypto ecosystem more safely.
Whether you’re a new user or someone looking to expand their portfolio, always stay informed and invest responsibly.
Trading involves risk.
Can I invest in cryptocurrency in India?
Yes, Indian citizens can legally invest in crypto, but they must use compliant platforms and be aware of the tax implications.
Is investing in crypto legal in India?
Cryptocurrency is not considered legal tender, but buying and selling digital assets is permitted.
Can I invest 100 rupees in cryptocurrency?
Yes, many platforms allow crypto purchases for as little as ₹100.
Do I pay tax on crypto in India?
Yes. Profits are taxed at 30%, and a 1% TDS applies to every transaction.
Can I mine cryptocurrency in India?
While not illegal, mining is less common due to high electricity costs and a lack of regulatory clarity.
What is the best cryptocurrency to invest in India?
Bitcoin and Ethereum are popular choices, but always conduct your own research before investing.
How do I protect my crypto assets?
Use hardware wallets, strong passwords, and two-factor authentication to protect your user assets.
Are crypto transactions traceable by the government?
Yes. FIU India requires exchanges to comply with KYC and AML norms.
What is the delivery trading difference in crypto?
Delivery involves holding the crypto after purchase, while trading may involve buying and selling quickly for profit.
Are crypto investments connected to the traditional banking system?
Bank transfer is commonly used to fund crypto accounts, but crypto operates outside the traditional banking system.
Author
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