Gold Silver Reports – Bitcoin, one of the most popular crypto currencies has witnessed volatile bouts in the last one year. If you are planning to invest in such crypto currencies, you should keep the following points in mind.
- 1 After rallying for almost 300 per cent, Bitcoin, one of the most popular cryp to currencies has witnessed a 31 per cent drop in the first two weeks of September. With prices stabilising now, Should investors use this crash as an oppor tunity to buy into the market?
- 2 IS IT A GOOD TIME TO INVEST IN CRYPTO CURRENCIES? | Neal Bhai Reports | Gold Silver Reports
After rallying for almost 300 per cent, Bitcoin, one of the most popular cryp to currencies has witnessed a 31 per cent drop in the first two weeks of September. With prices stabilising now, Should investors use this crash as an oppor tunity to buy into the market?
Crypto currency, a digital currency created through encryption techniques, has in the recent times emerged as a potential viable option for investment. However, due to huge volatility in its prices, it still poses a huge risk for investors with limited knowledge.
It is both a digital asset and payment system, the users of which can transact directly among them without a banking intermediary.Simply put, crypto currencies have no physical form. It would also be wrong to club crypto currencies with asset classes like fixed income or equity. Crypto currency is an asset class of its own.
With increased payment options, crypto currency can offer a multitude of benefits. In the recent past, several retail giants in a couple of countries have begun accepting crypto currency.
While many are making large fortunes in crypto currencies, it is important to remember that due to the massive variability in prices and short term growth, there is still a large amount of risk. Therefore, proper caution is advised.
There are several crypto currencies like Bitcoin, Litecoin, Peercoin, Namecoin, Ether, Primecoin etc.Bitcoin the most popular one and most Indian companies are associated with it.
The value of Bitcoin touched an all-time high when Japan passed a law to accept bitcoin as a legal payment method. However, with China recent decision to ban initial coin offerings (ICO) by some crypto currencies triggered a massive crash of almost 31 per cent in just two weeks.
Read More: Bitcoin Mania Takes Off as Cryptocurrency Surges Past $5,000
ICO, or Initial Coin Offering, is similar to an IPO, Initial Public Offering, in that it is the first time a currency is sold. These offerings are usually used to start a crypto currency network, get coin into use, and raise capital for the organisation.
The Reserve bank of India has not yet legally recognised crypto currency but had issued a notification call for caution to people against the use of virtual currencies. The main reason is that there is no regulation on crypto currencies, and fluctuations in prices can be huge. Swings as big as 25 per cent up or down are not uncommon.
If you are game for such challenges, you can still go bet on it.There are some safeguards that you would need to adhere.
The most important point of crypto currency investing is to ensure that you are doing everything safely and properly. Never disclose your private access key to your crypto wallet that the crypto currency companies give you to anyone on a public platform as if anyone lays their hands on it, they can easily access and wipe out your entire holdings. There have been several hacking incidents where people lost thousands of dollars and were unable to go through any course of action for recovering the losses.
Digital currencies stored on your personal devices like your mobile phone or your laptop can also lead to issues at times. If the device is lost, stolen or if its operating system crashes, the investor would end up losing his funds. The person therefore needs to create a backup. The investor can also store them in an offline wallet like an USB key or an SD card can serve a secure an offline wallet.
Also depending on your risk taking appetite, an investor can also begin small. For instance, they can start by investing just two to three per cent of their total investment corpus to begin with.
Buying crypto currency in India is relatively easier. There are several dedicated sites which offer you the option of buying crypto currencies with a credit card. In India too, you can purchase these currency either through your credit card or through net banking for quick transfer. There is a KYC requirement and you need to verify your ID by simply clicking a photo of your PAN card.
The number of companies dealing in crypto currency in India has grown from four in the year 2013 to 20 at present. – Neal Bhai Reports
