The world of cryptocurrency is very attractive and now it is much easier for the user to be able to access and manipulate it. However, like any other option that involves financial considerations, this one comes with a set of do’s and don’ts. We will explore the basics that the end user must know, in order to be able to get the most out of this market.
- How to enter the market – step by step guide
As a user, you can enter the market by subscribing to any of the cryptocurrency platforms that allow Indian users to transact on their platforms. While registering with any platform is the easiest thing, it is important for you to know more about the nature of the assets you are going to deal with. Unlike other forms of securities and assets that you may be familiar with, dealing in cryptocurrencies means that you must have a basic idea of the underlying blockchain technology, its country of origin, and the social and political influences that may lead to price fluctuations of cryptocurrency. In the past, tweets from celebrities like Elon Musk have led to erratic swings, and you should be aware of all of these before you end up either buying more or selling it all.
Most importantly, you can not put all your eggs in one basket, buy a lot of the same coins for your wallet, try to diversify the nature of your investments.
- what do you need?
You will need:
- select a cryptocurrency broker or cryptocurrency exchange;
- Register with the selected broker/exchange to open an account;
- Fulfill KYC requirements, including providing your PAN details;
- cash deposit (fiat currency) – this is usually validated by your NEFT transfer UTR number on most platforms;
- place your cryptocurrency order;
- Select the storage method.
When purchased from the exchange, it is usually stored in the wallet associated with the exchange. If you do not want to store the exchange, and want to move it to another place that is safer, you can choose between hot or cold wallet. A hot wallet is a crypto wallet that is stored online and runs on devices connected/connected to the web, such as computers and phones. These are convenient, but they can be accessed online, therefore, there is still a certain level of vulnerability.
On the contrary, a cold wallet is a crypto wallet that is offline and takes the form of any external device such as a hard drive or a USB drive. Since it is stored offline, it is treated as one of the most secure forms of storage; With a key code associated with it. As a cold crypto wallet user, you have to make sure that your device stays secure and that you own the code, or you may never be able to get your crypto back. This has happened, so be careful.
- Step-by-step instructions on what to do if you want to get out of the crypto/bitcoin industry
Since the industry is volatile, there is no specific or prescribed way out of this industry.
- One of the simplest solutions would be to set a target price and get out of the market at that time. For example, if you buy a specific crypto asset for INR 2,000, and you can set your target sale price at INR 2,500 and thus sell your crypto asset as soon as it reaches that amount.
- You can also choose to exit with a percentage of return; Accordingly, once this target is reached, you can sell half of your investment and sell the next half at a similar target return rate.
- Some also prefer to go out with the wallet. For example, if you have invested INR 500,000/- and after a certain period of time you feel the need for around INR 750,000/- if your crypto-asset portfolio gets this far, you may prefer to sell your assets and exit the market.
- It is also possible for you to specify a day, week or month to sell a percentage of your investment. Let’s say you want to sell 10% of your investment periodically, and by the end of 10 cycles, you have then sold the entire investment.
These are not ideal scenarios, but they are one of the many available to you to exercise.
- What are the other alternatives to joining?
Considering that not everything will be comfortable when buying cryptocurrencies directly, due to volatility, you can always consider investing in crypto-related companies. This will be a convenient proposition for anyone who intends to invest in companies that have greater regulatory oversight and may remain involved in the blockchain/cryptocurrency ecosystem.
As tip tip, as with any other form of investing, ensure that your appetite for financial risk and your investment goals are aligned with the expectations and potential outcomes of that particular venture. It is a very speculative investment and yearns for you to invest with great caution and careful consideration.
The opinions above are those of the author.
end of article