Investing in cryptocurrencies? Here’s Everything You Need To Know – WazirX Cryptocurrency

*This is in collaboration with BloombergQuint Brand Studio

Crypto is now a widely accepted digital asset class in India with most of the new signups coming from investors in B and C class cities. From a macro-global perspective, the crypto market was valued at $1.49 billion in 2020 and is expected to reach $4.94 billion by 2030. This growth will not be driven by speculation, but rather because of the critical need for greater efficiency and transparency in payment systems, the need for data security and an increasing demand for money transfers.

The recent Union budget brought crypto into the realm of taxation, clarifying an aspect that had previously worried some investors. The Reserve Bank of India is also rolling out a digital currency in April 2022. There is a visible buzz of anticipation when it comes to crypto in India.

Crypto offers huge upside potential for the investor who takes the time to understand this asset class, its risk and potential, and invest wisely by striking the right balance. If you’re looking to invest in crypto in 2022, here’s everything you need to know and make sure you read this before investing.

First, it is important to understand the easiest way to invest in crypto:
1. Crypto Exchange Platforms

By far the easiest way to buy (and sell) cryptocurrency in the current market, crypto exchange platforms have revolutionized crypto trading in recent years. These platforms are 100% digital, self-regulated and operate 24×7, allowing you to transact at any time, unlike other financial markets. One of the top platforms in India is WazirX, owned by Binance, which offers various options for both private and corporate and HNI investors.
2. P2P transactions

The next step is person-to-person transactions, also known as “P2P” transactions. In this scenario, you can transfer ownership of a digital currency directly from/to another party. However, this can prove to be a lengthy process as crypto price matching is fraught with caveats and finding a buyer/seller that fits your deal is not an easy task. If you are an expert, you could try this.

3. Crypto Mining

The way it all started. While some are still trying this approach, mining crypto is an extraordinarily complex undertaking that requires terribly expensive hardware and software, and often enough electricity to power a small town. You may be able to mine some crypto, but your utility bill could be driving you out of business. Certainly not an option for laymen.

Next, what are the important things to keep in mind before buying crypto in India in 2022?

As things stand, a crypto exchange platform is your best bet if you want to buy and sell crypto. And this means that finding the right exchange platform is crucial before investing.

Here are a few key factors to look for when choosing a crypto exchange platform:

  • Make sure that the exchange’s website has a good user experience and is easy to navigate.

  • Check if the exchange offers trading pairs, i.e. a feature that represents two currencies traded for each other on an exchange.

  • Before deciding on a platform to buy crypto in India, it is especially important to consider safety. While there is no regulation in India around crypto investment and trading, leading exchanges like WazirX have excellent KYC standards and a high quality of self-regulation and security based on global best practices. Avoid using exchanges that do not have a KYC system.

  • Compare multiple trading platforms to check for trading fees; you don’t want it to be too high.

Last month, the Indian government released clarity regarding the taxation of crypto income, which will come into effect from April 1, 2022. It is important to understand these rules and how they can affect your earnings.

  • From April 1, 2022, the income tax on crypto income will be 30% in India, after being classified as a Virtual Digital Asset (VDA) for tax purposes.

  • Only the purchase cost may calculate such income. This means that no amount related to other expenses (transaction costs, interest, etc.) may be deducted.

  • The basic exemption limit of Rs 250,000 does not apply to crypto transfer earnings.

  • If the VDA transfer is recognized as a loss, it cannot be offset against other income, nor may the loss be carried forward to subsequent tax years.

Buy crypto on WazirX

Now that you’re armed with all the information you need, here’s how to get started:

1. Create an account on WazirX through the website or app, after confirming their terms of service, verifying your details and KYC.

2. Add money to your WazirX account via UPI/IMPS/NEFT/RTGS.

3. Buy what you like! Interact with the WazirX dashboard, view the latest prices of various cryptocurrencies, study past trends and make informed decisions.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts