Young people drive cryptocurrency growth, regardless of the dangers: The Tribune India
Vijay C Roy & Seema Sachdeva
The scale of it is a revelation – India now has 15 local cryptocurrency exchange platforms that allow trading and selling, with over 1.5 crore of users. At 10.07 crore, India also has the highest number of crypto owners in the world, according to broker discovery and comparison platform BrokerChooser. The United States and Russia rank far second and third, respectively. In terms of the number of crypto owners in terms of population, India ranks fifth.
A rapid increase in investment and several new domestic launches followed the Reserve Bank of India’s cryptocurrency clarification in May this year, asking regulated banks not to warn customers against trading in cryptocurrency. under its 2018 ordinance, which prohibited such transactions. The three-year-old RBI circular was quashed in 2020 following the Supreme Court’s intervention on a petition filed by the Internet and Mobile Association of India (IAMAI) and crypto exchanges.
While substantial profits are within the realm of possibility, so too are the risks of huge losses and fraud in cryptocurrency trading – and there is currently no regulatory authority to which the investor can turn. The risk is entirely his. However, a capital gains tax of 30 per cent will be levied on the profits made.
Young Indians are the source of robust growth; those under the age of 35, in fact, form the core of investors in popular cryptocurrency exchanges like CoinSwitch Kuber, Zebpay, WazirX, UnoCoin, CoinDCX, and many more.
Like Ludhiana’s Class XII commerce student who is already a 16-year-old crypto trading veteran. A keen investor in Dogecoin, he has made a good profit with his pocket money, but is wary of his name. “I kept it a secret even from my family; they won’t approve, it’s too risky for them, ”he said. The teenager sold the coins, ordered goods from China and then made money by selling them to friends at his home. “I don’t want to wait 8-10 years before I start making money. I put very little into the market and my profits were more than what I invested. I’m also trying to diversify into different companies, ”he adds, sounding quite a seasoned investor.
It was the lure of quick cash that attracted 19-year-old Ishaan Jindal, also a sophomore at Christ University in Bengaluru. “I was following the crypto news when there was a major surge in the market. Dogecoin, which started off with just a few cents, rose 300-400%. Bitcoin has also reached unprecedented levels. Many of my friends had started investing and I took the plunge when I felt I couldn’t sit on the fence anymore. There was a time when I even engaged in day trading. Since in this open market, trading takes place 24/7, there were times when I would get up in the middle of the night to check on developments, ”says Ishaan, who has created several accounts of portfolio on different platforms.
For another 19-year-old, Shrenik Bhalla, it was Robert Kiyosaki’s “Rich Dad Poor Dad” who pushed him to invest. He had saved money donated by his family over the years, and instead of bank FDs, mutual funds, or the stock market, this new market caught his eye. Shrenik, who often searches for cryptocurrencies by solving computer puzzles, says, “As the stock market was still recovering from last year’s slump, I researched cryptocurrencies for four to five months. before venturing there. I started with $ 200. After losing money initially, I capped my investments.
National crypto exchange WazirX, which has over 90 lakh users, says crypto is the popular new alternative investment option for young adults, and they don’t mind.
Chandigarh-based investment consultant and real estate agent Vinay Sachdeva agrees. It receives seven to eight requests per day, mostly from young people, as there is no age limit to enter the crypto market. Vinay says, “Queries have increased over the past year, especially since Bitcoin started to reach new heights. The latest RBI guidelines have sparked interest. Seniors, however, remain reluctant to invest in this fluctuating market.
It is a very volatile market that depends entirely on supply and demand, he emphasizes. “Currently there is a bull run. This should continue over the next few months, but a correction will come, ”he adds.
“Fascinated by huge profits and looking for ways to beat pandemic boredom, young people buy cryptocurrency – and quickly learn about the ups and downs of the market,” says Shantanu Kashyap, who invests in the stock market. for over two decades and entered the live crypto around four years ago.
“We have about 45 lakh users. The average amount of investment people make is around $ 200 to $ 300. The investment option is aimed at a very young population, with the average age of a crypto investor in their mid-twenties, ”says Sumit Gupta, co-founder of CoinDCX, who claims to have become the first unicorn Indian cryptocurrency.
“Cryptocurrency investments in India increased from $ 923 million in April 2020 to $ 6.6 billion in May 2021, representing a growth of 400% in one year,” said Ankit Agarwal, MD, Alankit Ltd.
Social media has also played a big role in creating a hype around blockchain technologies and cryptocurrencies.
According to Rishabh Sharma, 22, from Panchkula, a recent PEC graduate, “Since concepts like blockchain technology and cryptocurrency are not easy to understand, there are YouTube videos, blogging sites, webinars, discussion forums and slack channels educating potential customers. Then there are social community groups on WhatsApp, Facebook, Twitter, and Telegram, offering advice on research and investment.
Tech serial entrepreneur and angel investor Kunal Nandwani, who has watched the market for five years, believes that getting celebrities to promote it gives credibility and legitimacy to this risky venture and young people believe that it’s cool to invest in it. “However, with no regulations still in place, you are totally on your own,” warns Kunal, who is the author of books on blockchain and Bitcoin.
“Today, even tweets from powerful people change the coin’s value. The token Shiba Inu coin rose more than 55% within 24 hours of a tweet from SpaceX CEO Elon Musk. For now, the market is going in one direction, but we won’t know the actual numbers until after the correction, ”says Kunal, adding that“ it’s only when the music stops that we can see who’s gone. to dance “.
As very little is still known about this market, the chances of people falling prey to illegal transactions and fraud are quite high, warns Sarvjeet Singh Virk, co-founder of Finvasia. “It is important to secure your investments against hackers. He suggests using offline wallets to secure investments. “There are offline wallets available on e-commerce platforms, which is one of the most popular ways to store cryptocurrency. Along with PIN codes and passwords, hardware wallets are considered the best way to protect your cryptocurrency.
According to Sathvik Vishwanath, CEO of Unocoin, “Investors should be careful about the risk hedging inherent in the speculative crypto market, which is less than a decade old. They shouldn’t invest what they can’t afford to lose.
Game developer and content creator Krishan Kumar wants investors to have a long-term perspective and not just work for quick returns. “In the times to come”, he believes, “the cryptocurrency has the potential to become a future currency”.
The risks involved
Lack of government regulation: A cryptocurrency bill has already been tabled with the Union Cabinet, but a decision has yet to be made in this regard.
Virtual theft: despite a highly secure alphanumeric number that changes with each transaction, cryptocurrencies run the risk of virtual theft from hackers.
High volatility: Cryptocurrencies are very rewarding investments, but there can be extreme price changes due to fluctuating demand and supply.
Secure your investment
The government has yet to put in place guidelines to regulate the industry. However, the industry has proposed some measures to stay protected:
Use hardware or offline wallets: These are offline physical devices that connect to the investor’s computer, laptop or mobile when they want to make a transaction.
Multi-level authentication: Online password protected wallets are susceptible to easy hackers and prone to password theft. Authentication in three or more steps takes a long time to violate and therefore less appeal for hacking.
Diversify your investment: “Don’t put all your eggs in one basket” is an old adage. When investing, look at the intersection of other options in the market.
Transaction Tracking: Keep track of your wallet and crypto account. Set a schedule and stick to it, that you don’t plan to buy or sell anything.
Be careful: don’t blindly trust a stranger and share your alphanumeric wallet number with anyone.
Digital currency basics
- Cryptocurrencies are virtual or digital tokens traded by individuals or groups.
- More than 2,000 crypto-currencies are said to exist; Bitcoin is the first and most important cryptocurrency to be widely used.
- Bitcoin was created by Satoshi Nakamoto, an alleged pseudonym, in 2008 and released as open source software in early 2009. The first Bitcoin transaction took place between him and an early user in January 2009.
- In 2010, the first sale of an item using Bitcoins occurred when a customer used 10,000 Bitcoins to purchase two pizzas.
- The years between 2012 and 2017 saw the Indian cryptocurrency market gain momentum.
Invest in crypto
- Download the cryptocurrency exchange app and create an account following KYC standards.
- Cryptocurrency trading is the same as trading stocks. Like there, you link your bank account with one of the Indian cryptocurrency trading platforms. You can create multiple trading accounts.
- There is no minimum limit for investing since the cryptocurrency is divisible depending on the amount you want to invest.
- All transactions are done in dollars, but you don’t need to convert your currency to dollars. The cryptocurrency wallet linked to your bank will automatically perform the conversion.
- Once you have bought or sold the cryptocurrency of your choice, you can liquidate the regular coin through your wallet or bank account. Profits are subject to capital gains tax.