Might be a new term for many but Cryptocurrency has been a topic of discussion since the year 2009 when people had started proposing to each other for buying the newly launched Bitcoin at the offered price of Rs.1. And many B school’s finance graduates had actually done to enrich their knowledge on the investment tools. Today we would simplify this heavy-sounding word so that you could easily understand the complete details about this trending topic in a simple way.
FAQ 1: What is Cryptocurrency?
The term “crypto” means hidden or secret whereas “currency” means a monetary instrument that circulates in the market for common masses for buying and selling goods & services to sustain a livelihood.
The Cryptocurrency is a just digital investment monetary value which was actually developed for buying goods, services online and for investment purposes but still unacceptable by many because of risk factor associated with it. Unlike SEBI, there is no regulatory body in case of Cryptocurrency for redressal of your grievances and no national or foreign statutory body would be able to get your Cryptocurrency back from the company you invest your cryptocurrency into in case of any scams or fraudulent seller.
FAQ 2: Is it a Currency or Investment tool?
Named as such that it appears to be like any country’s currency note but it just digital money which can never be converted into physical money and kept in a digital wallet itself? Mainly viewed as an investment tool among people which investors are less likely to circulate and rather keep it in the wallet so that its values appreciate with time.
Some of the popular cryptocurrency by market capitalization as on January 27, 2021, were
Bitcoin is the most popular digital currency with a market capitalization of $563.8 billion; followed by Ethereum with $142.9 billion. Tether ranks third with 25.2 billion with Polkadot enjoying the fourth place with $13.9 billion. Other being XRP, Cardano, Chainlink, Litecoin, Bitcoin Cash, Binance Coin at $ 11.4 billion,$9.7 billion,8.3 billion,$8.1 billion,$7billion,$6.2 billion respectively.
FAQ 3: Who can invest in Cryptocurrency?
You need to choose an exchange to be eligible to buy, sell and hold Cryptocurrency. Try choosing those exchanges that allow you to withdraw Bitcoin in your personal wallet. Some of the US-based exchanges are Coinbase, Kraken, Gemini & Binance U.S. Once you have created your accounts and completed your KYC details you will be directed to payment options through bank accounts, debit or credit card. It is always advisable to check whether your bank allows this as many banks have blocked exchange to such sites because cryptocurrencies are volatile and not stable.
FAQ 4: Why do we invest in Cryptocurrency?
People from the finance fraternity invest in Cryptocurrency to enrich their investment analysis and others because out of speculations. Those who buy it is for getting incredible returns because their money lies in the digital wallet, unlike Stock Market trading where SEBI keeps all investor’s money, easy to sell & buy, simple and only speculated alternative before investor in case Stock Market crashes.
FAQ 5: Is Cryptocurrency safe to invest in India?
Cryptocurrency is highly volatile and has no cash flow. Moreover, there is no regulatory body to recover our money in case the company refuses to refund or turns out to be a fraud. Hence the only option before an investor is to buy bitcoin and keep it in the wallet and analyze how its value is appreciating or depreciating with time.
FAQ 6: What is the current Bitcoin price in India?
26,63,575.07 Indian Rupees on February 3, 2021
FAQ 7: What’s the guaranteed return with Cryptocurrency?
There is no guaranteed return with cryptocurrency as the market is volatile and there is no regulatory body to speculate the future performance on the basis of its previous year’s performance. Most investors have been seen investing with imperfect information lured by high rising prices of bitcoin which goes even higher leading to a bubble that will eventually burst causing losses.
FAQ 8: What’s the future of Cryptocurrency in India?
Though we see lots of investment tool available before Indian investors for creating wealth in the long run but unfortunately a lot of Indian are still skeptical towards digital transactions and investment options having witnessed significant scams and fraudulent such as poor performance of blue-chip companies & chit funds scams, stock market crash of 2008, Sahara Group’s Chief Subroto Roy sentenced to imprisonment and nonpayment of dividends to investors and policyholders.
FAQ 9: Bitcoin is legal in India?
Bitcoin is legal to sell, buy or trade bitcoins in India. In fact, bitcoins were never regulated by any central authority in India.
FAQ 10: What will Bitcoin cost in 2021?
Citi analysts predict the price of Bitcoin at the level of 1,00,00,000 Indian Rupees at the end of 2021.
Hence it is still a long run for cryptocurrency to gain confidence in Indian Market as digital transformation is still gaining momentum and people still need advisors (physical contact) to consult and rely on in case of suggesting suitable investment policy, knowing terms & conditions, filling documents, collecting documents and reaching to them every time in case of any query. These options are currently lacking with cryptocurrency as it a foreign digital platform with no regulatory body like SEBI associated with it, it has no cash flows, and negative news floating in the market about other countries like China banning it which adds to Indians’ doubt.
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