Indians' Guide To Crypto Investment: Getting Started

Cryptocurrency has become an increasingly popular investment option for Indians, especially the youth, due to the allure of high returns. With over 100 million investors, India has become the highest holder of cryptocurrencies in the world. The steps to investing in cryptocurrencies in India are as follows: carefully select the cryptocurrency, find a cryptocurrency exchange registered with the Financial Intelligence Unit India, open a trading account, register the payment method, and place the order. The most popular cryptocurrencies in India are Bitcoin, Ethereum, Litecoin, Cardano, Polkadot, Stellar, and Dogecoin. It is important to note that the market for cryptocurrencies is volatile and influenced by market conditions.

Select a safe crypto platform or exchange

When selecting a safe crypto platform or exchange in India, there are several factors to consider. Firstly, it is essential to prioritise security. Choose a platform with robust security measures such as two-factor authentication (2FA), cold storage of funds, and insurance against theft and hacks. Additionally, look for platforms that conduct regular security audits and implement bug bounty programs to identify vulnerabilities.

Secondly, consider the user interface and ease of navigation. Opt for a platform with a user-friendly interface that is easy to navigate and facilitates efficient trading. This is especially important for beginners who may be new to the complex world of cryptocurrency.

Thirdly, compare the fee structures of different exchanges. Trading fees, deposit fees, and withdrawal fees can vary significantly between platforms, so it is crucial to find one that aligns with your budget and trading frequency. Some platforms may also offer zero-fee trading or discounts for specific payment methods.

Fourthly, assess the liquidity of the exchange. Higher liquidity ensures quicker and smoother transactions, especially during volatile market conditions. Look for platforms with a large user base and high trading volumes.

Fifthly, research the range of cryptocurrencies supported by the exchange. If you are interested in a diverse portfolio, choose an exchange offering a wide variety of coins and tokens. However, if you are primarily focused on popular cryptocurrencies like Bitcoin or Ethereum, a more specialised exchange may suffice.

Lastly, consider the exchange's regulatory compliance, reputation, and customer support. Ensure the platform complies with Indian laws and regulations and has a good track record of reliable performance. Responsive customer support is also essential to address any issues promptly.

Some of the popular crypto platforms and exchanges in India include WazirX, Binance India, Kraken, ZebPay, Paxful, CoinDCX, Unocoin, BitBNS, Coinbase, Giottus, and Krypto. Each platform has its own unique features, fee structures, and security measures, so be sure to research and select the one that best aligns with your investment needs and strategies.

Make a crypto wallet

To store and trade Bitcoin and Altcoins, you need a crypto wallet. Most crypto wallets are loaded with features that enhance the process of trading cryptocurrency. The top bitcoin wallets in India usually have two-factor authentication to keep them secure.

• Choose the type of crypto wallet you want: There are two main types of crypto wallets: hot wallets and cold wallets. Hot wallets are connected to the internet and are more convenient to use, but they are also more vulnerable to hacking. Cold wallets, on the other hand, are not connected to the internet and provide enhanced security for your crypto keys. Cold wallets are typically hardware devices, such as USB sticks or devices that scan QR codes.
• Select a crypto wallet provider: There are many Indian crypto wallet providers in the market, so it can be challenging to choose one that suits your needs. Some popular options include Ledger, Trezor, MetaMask, Trust Wallet, and Exodus. Compare the features, security measures, supported cryptocurrencies, fees, and user-friendliness of each wallet before making a decision.
• Set up your crypto wallet: Once you have chosen a wallet provider, you will need to set up your wallet. This may involve downloading software or a mobile app, creating an account, and setting up security measures such as two-factor authentication and a password.
• Fund your crypto wallet: After setting up your wallet, you can start using it by transferring funds into it. You can typically fund your crypto wallet through bank transfers, net banking, cryptocurrency, or UPI.
• Start trading: With your crypto wallet funded, you can now start trading cryptocurrencies. Remember to consider the fees charged by the wallet provider for each transaction and compare them with other providers to ensure you are getting a good deal.

Some popular crypto wallet providers in India include:

• Ledger Live: Ledger Live provides a hardware wallet that keeps private keys offline, protecting them from online threats. It supports a wide range of cryptocurrencies and NFTs.
• Trust Wallet: This wallet is perfect for beginners as it offers a simple and intuitive mobile app. It supports a variety of cryptocurrencies and provides industry-leading security and privacy measures.
• MetaMask: MetaMask is a software cryptocurrency wallet used to interact with the Ethereum blockchain. It is self-custodial, meaning users have full control over their private keys. It supports a wide range of cryptocurrencies and can be used as a browser extension or mobile app.
• Exodus: Exodus is known for its intuitive interface and supports various cryptocurrencies. It also offers a built-in exchange, making it easy to trade between different cryptocurrencies.
• WazirX: One of the top bitcoin wallets in India, WazirX offers a secure platform to buy, sell, and trade cryptocurrencies. It supports more than 100 cryptocurrencies.

Remember to always do your research and understand the risks involved before investing in cryptocurrencies.

Connect your bank account to the wallet

To invest in cryptocurrencies, Indians can use platforms such as CoinDCX, CoinSwitch, Mudrex, and WazirX. These platforms are registered with the Financial Intelligence Unit of India and offer user-friendly interfaces and extensive support for BTC trading pairs.

To get started with investing in crypto, you'll first need to connect your bank account to your chosen platform's wallet. Here's a step-by-step guide on how to do this:

• Choose a Crypto Platform and Create an Account: Select a crypto platform that suits your needs, such as those mentioned above. Sign up and create an account, providing any necessary personal information and verifying your identity.
• Navigate to the Wallet Section: Once you have access to your account, locate the wallet or deposit section. This is where you will find the option to connect your bank account.
• Select the Option to Connect Your Bank: The platform will likely provide you with a set of instructions or prompts to guide you through the process of connecting your bank account. Follow these steps carefully.
• Provide Your Bank Account Details: You will need to input your bank account information accurately. This typically includes your account number, routing number, and other relevant details.
• Authorize the Connection: Depending on your bank and the platform's requirements, you may need to authorize the connection between your bank account and the crypto wallet. This could involve providing additional security codes or verifying the connection through your online banking portal.
• Confirm the Connection: Once you have provided all the necessary information and authorizations, confirm the connection. The platform will then verify the connection with your bank.
• Test the Connection (Optional): Consider making a small deposit or purchase to ensure that your bank account is correctly linked and functioning properly with your crypto wallet.

By following these steps, you can securely connect your bank account to your chosen crypto platform's wallet, enabling you to buy, sell, and trade cryptocurrencies with ease. Remember to always do your research, understand the risks involved, and only invest what you can afford to lose.

Place an order to buy cryptocurrency

To place an order to buy cryptocurrency in India, you must first choose a crypto exchange platform. Some of the most popular platforms in India include CoinDCX, ZebPay, WazirX, CoinSwitch, and Mudrex. These platforms are registered with the Financial Intelligence Unit India and offer user-friendly interfaces and robust security measures.

Once you have chosen a platform, you will need to create an account and complete the KYC (Know Your Customer) process. This typically involves submitting essential documents such as your Aadhaar Card and PAN card. After your account is set up, you can add funds to your account using various payment methods, including bank transfers, net banking, UPI, and credit or debit cards.

Now that your account is funded, you can place your first order to buy cryptocurrency. Depending on the platform, you may be able to purchase by tapping a button or entering the cryptocurrency's ticker symbol (e.g. BTC for Bitcoin). You will then need to input the amount you want to invest.

It is important to note that buying a whole unit of a cryptocurrency like Bitcoin may require a significant upfront investment. However, you can purchase smaller units or fractions of a cryptocurrency if you do not want to buy an entire unit. For example, with Bitcoin, you can invest as little as INR 100 on platforms like CoinSwitch.

After you have placed your order and completed the transaction, you will need to consider how to securely store your cryptocurrency. Most crypto exchange platforms offer integrated crypto wallets or partner with preferred wallet providers. You can also choose to store your crypto in a third-party wallet, either online ("hot wallet") or offline ("cold wallet"). However, if you use a third-party wallet, remember that losing the private key may result in permanently losing access to your coins.

Sell your cryptocurrency

When you decide to sell your Bitcoin, you can place a sell order through your chosen exchange, much like when you initially purchased it. Most exchanges offer multiple order types, so you can decide to sell only when Bitcoin reaches a specific price or place an order to be completed immediately.

You can sell your entire Bitcoin holdings or only a specified amount. Once the sale goes through, you can transfer the money to your bank account. However, be aware that your exchange may have a holding period before you can transfer funds back to your bank. This is normal and is to ensure transparent transactions.

When you sell your Bitcoin, you may make a profit. If you do, you will need to pay capital gains taxes, as cryptocurrency sales must be reported on your taxes. In India, any profit made from selling crypto for fiat currency or trading crypto for crypto is subject to a flat 30% tax with no exceptions.

WazirX

• Log into your WazirX account and go to funds.
• Choose the cryptocurrency you wish to sell.
• Select deposit to reveal the deposit address.
• Transfer your crypto from your wallet to the provided deposit address.
• Once the transaction is confirmed on the blockchain, you will be able to see your crypto in your WazirX account.
• Log into WazirX and go to markets.
• Select the correct INR trading pair for your crypto, for example, BTC/INR.
• Enter the amount of crypto you want to sell.
• Confirm the details of your transaction.
• Your order will be processed and confirmed as soon as there is a matching buy order.

CoinDCX

• Log in to your CoinDCX account and go to wallets.
• Select the cryptocurrency you want to sell and select deposit.
• You will be provided with a deposit address for that particular crypto.
• Transfer your crypto from your wallet to the given deposit address.
• Once the transaction is confirmed, your funds will be available in your CoinDCX wallet.
• Log in to CoinDCX and go to markets.
• Select the crypto you want to sell.
• Select the amount of crypto you want to sell.
• Confirm the details of your transaction.
• Your order will be processed and confirmed.

Binance

• Log in to your Binance account and select deposit.
• Select deposit crypto.
• Select the cryptocurrency you want to transfer to Binance to sell.
• Select the deposit network, ensuring it matches the network of the wallet you are withdrawing funds from.
• You will now be able to see your deposit address.
• Transfer your crypto from your wallet to the deposit address.
• Once the transaction is confirmed, your funds will appear in your Binance wallet.
• Log in to Binance and go to P2P trade (make sure you've added a payment method beforehand).
• Select the crypto you want to sell and the fiat currency you wish to sell it for.
• Enter the amount of crypto you'd like to sell.
• Select sell with 0 fee.
• Select your preferred payment method.

Frequently asked questions