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How To Invest In Bitcoin In India

How To Invest In Bitcoin In India

Want to know how to invest in bitcoin in India? Well you have landed on the right article, make sure to read the article.

Bitcoin is a term that most of us have heard about and which has been widely popular over the last few years. To put it simply, Bitcoin is a popular digital or virtual currency which is not regulated by any government agency or any central bank. 

They are issued and managed altogether through computerised networking and are open-source, which in turn means that anyone can take part in the process. Bitcoins can be used to buy any product or service and are stored in a ‘digital wallet’.

All transactions involving Bitcoins are stored on a public list, which is known as the blockchain. Despite the rising demand for cryptocurrencies, Bitcoin is still not generally recognized, and several governments have outright banned it.

Only 21 million Bitcoins exist and approximately 19 million are already in usage, which means that over 90% of Bitcoins are already mined, and the rest will be mined by 2140

As of 9th November 2021, the price of Bitcoin is $68641.57. It is estimated that 15 to 20 million Indians are invested in the crypto market and as per experts' view, the market will surge further given rising inflation.

How To Buy Bitcoin In India (2022 Updated)

Different Ways To Invest In Bitcoin In India 2021

Bitcoin’s dependable blockchain technology, its reliability, and its easy accessibility make it the most preferred cryptocurrency for investment. A digital ledger is built by blockchain technology where previous Bitcoin transactions are recorded in such a way that it is difficult to reverse, hack, copy or manipulate the data.

The blockchain makes the digital record of transactions accessible by distributing it throughout the whole network of computer systems. All cryptocurrency exchanges have Bitcoins available for trading and investment purposes.

Various online merchants across the globe accept Bitcoin as a payment mode; this practice may soon follow in India.

There are largely three different ways to invest in Bitcoin in India:

Cryptocurrency Exchanges

Cryptocurrency exchanges are platforms where one can sell/buy cryptocurrencies like Bitcoin, Shiba Inu, etc. It is possibly the easiest way to invest in Bitcoins.

All one needs to do is to open an account with any cryptocurrency exchange, add money to the account and start trading through the platform. The platform charges transaction fees to the trader for the buying and selling of Bitcoins.

Investing via P2P Transactions

P2P (Person to Person) transaction mode can be used when you do not want to pay the transaction fees or don't want to use the cryptocurrency exchange platform.

In this option, the platform merely acts as a facilitator and helps to find the right Bitcoin seller. After this, you need to close the transaction. A platform like Paxful, in India, normally doesn’t charge any fee to the buyers, but the sellers need to pay a nominal fee of 1% of the transaction value.

Investing via P2P Transactions

But other cryptocurrency platforms may charge a fee for P2P transactions and thus, it is important to check before investing in Bitcoins. 

Mining of Bitcoins

To know the answer this question "how to get bitcoins" you must perform these steps. The process of mining requires you to successfully add a block to the blockchain. When this is done, you are rewarded with Bitcoins.

The process involves two different tasks:

  1. First, the past Bitcoin transaction that has already taken place needs to be verified. It is essential to validate a file that is 1 MB in size and contains data about Bitcoin transactions. 

  2. The second step is to solve a difficult mathematical equation so that the verified block of Bitcoin transactions can be added to the already existing blockchain. 1 Bitcoin is awarded once both the tasks are completed.

How To Invest In Bitcoin In India Legally?

People who are interested in buying Bitcoins can follow the steps given below to invest in Bitcoin legally:

1. Basic Documents such as Aadhaar Card and PAN card must be submitted by the investor. After that, the KYC process should be completed successfully.

2. Thereafter, an order must be placed on a cryptocurrency exchange to buy Bitcoins.

How to Buy Bitcoin in India Legally?
  1. 3
    After the order is placed, the investor should transfer the payable amount from his/her bank account to the cryptocurrency exchange platform. Debit cards, credit cards, RTGS, NEFT, and other methods of digital payments can be used for making this transfer.
  2. 4
    The purchased Bitcoins should be then stored safely in the digital wallet provided by the cryptocurrency exchange

There is no minimum amount of Bitcoin that an individual has to buy. Small units of the currency can be purchased by an investor instead of buying the whole cryptocurrency.

Before investing, comprehensive research should be done by an individual by studying the various data that is available on different websites. The Indian crypto market and the Global market should be studied.

One can also track different prices of digital currencies through regular review of information on various cryptocurrency exchanges. Bitcoins and other digital currencies are volatile assets, and thus downsides should also be analysed by an investor. 

How To Purchase Bitcoin In India

The most important task for an investor is to first ensure the completion of the KYC Process. The PAN card of the investor must be linked to a bank account for withdrawal and transfer of funds.

Once this is done, an investor can use popular cryptocurrency exchanges like WazirX, CoinDCX, CoinSwitch Kuber to buy Bitcoins at the current market price.

Where to buy bitcoin

While international credit cards may be used to purchase Bitcoins on certain digital exchanges, most of these exchange platforms offer mobile applications that are compatible with both Android and IOS.

Thus, instant transactions can be done by potential investors by just linking their bank accounts to these applications. However, an investor needs to choose a trusted cryptocurrency exchange platform and must consider factors like smooth interface, ease of usage, and minimum trading fee.

The security aspect of the platform should also be considered to avoid any financial crimes and associated losses. It is also important for investors to carry out some research on the minimum investment that they may need to make for trading. 

How to mine Bitcoin?

Bitcoin can be mined by solving a complex mathematical equation and adding blocks to the cryptocurrency ledger, which is known as the blockchain.

However, the process is not easy and requires a high-end computer that is very powerful and can deliver in complex scenarios. Over the last few years, the prominence of virtual currency along with advances in processing power have made mining Bitcoin even more arduous.

The mathematical equation has now become more complex, and it takes more time to solve as more and more people are trying to mine Bitcoins.

After solving the mathematical equation, 1 MB worth of block (Bitcoin transaction) needs to be verified and added to the blockchain. Your mining software also identifies which of the remaining pending transactions will be pooled together in the next block.

The block thus created is then sent to the whole network and other computers are required to validate the same. Each computer verifies your input and adds that transaction to the next block, on its copy of the transaction ledger.

At the end of this process, the system generates Bitcoins as a reward for the effort taken by the miner.

How to store Bitcoin?

Bitcoins are stored on a blockchain wallet. A cryptocurrency wallet also ensures the safety of the funds by storing keys for enabling transactions and signing information. There are two types of wallets:

1. Cold wallet:
Cold cryptocurrency wallets store a person's private keys and exist offline. These wallets extend an increased level of security, as they do not store information digitally. They work together with a person's compatible computer software.


2. Hot wallet:
Hot wallet stores information digitally. Users can facilitate basic transactions by sending and receiving tokens across the internet. Types of hot wallets depend on their software usage and are namely:

  • Desktop wallet - This wallet stores information on your desktop and is thus more secure than web-based wallets.
  • Web wallet - This works through an internet connection and is protected with encryption.
  • Mobile wallets - These are software that can be installed on mobile devices and be used for making and receiving payments as well as storing data.

Points to Remember When Buying Bitcoins in India

A potential investor must understand the volatility of cryptocurrency and know that it is a high-risk investment. Bitcoin is unpredictable and thus comes with a much higher risk than any other investment.

The Indian crypto capital market and the global scenario should be analysed and studied by an investor before initiating an investment. Many websites have ample material on Bitcoins to help potential investors.

It is also recommended that an investor tracks the prices of various cryptocurrencies and gauge the extent of Bitcoin’s presence in the crypto market. Different online platforms serve this purpose.

Investors can check exchange platforms for updates on Bitcoin.

Conclusion

Bitcoin is a new financial instrument in the Indian market, and it has been known to give high returns in a relatively short period. Bitcoin is unpredictable, and the Reserve Bank of India has also not framed rules for its regulation.

So while cryptocurrency is legal in India, there is no legislation to regulate it. Thus, it is always susceptible to high risks and an investor may lose his capital.

The Indian government is working on a framework to bring the cryptocurrency market under regulated governance. Just like any other investments involving high levels of risk, all aspects must be considered before investing to take care of unknown scenarios. 

I hope you liked our article on how to Invest in bitcoin in India, and it must have solved your queries such as how to purchase bit coin in India, where to buy bitcoin in India, or how can i buy bitcoin in India

if you have any comments or suggestions regarding the article "how to get bitcoin in India" than please do share them in the comments below.

Frequently Asked Questions

1. Can I invest 1000 RS in Bitcoin?

Yes, there is no defined minimum amount that should be invested in Bitcoin. In India, one can start trading in Bitcoin with just 100 Indian Rupees.


2. Can I convert Bitcoin to cash in India?

Yes, with many exchange platforms facilitating buying and selling of Bitcoins using INR, it is easy to convert Bitcoin to cash. Once you sell your share of Bitcoin, the balance in your exchange will get updated. The amount can be then transferred to your bank account.


3. Is Bitcoin safe and legal in India?

There is currently no legislation governing cryptocurrencies. That does not, however, render cryptocurrencies illegal in India. It simply means that there is no regulatory structure in place in the nation to protect Bitcoin owners. India is also working on legal frameworks to regulate cryptocurrencies. Adequate research and analysis of available information can make an investment in Bitcoin safe.


4. How do I sell Bitcoins?

The safest and easiest way to sell Bitcoins is through a cryptocurrency exchange platform. You can also use the P2P platform mode to sell Bitcoins.


5. Can you lose money from Bitcoin?

Yes, cryptocurrencies are very volatile, and their prices fluctuate dramatically on a daily basis. In this scenario, the timing of your conversion is critical. You might potentially lose money if your timing is off, and vice versa.

Ankur Aggarwal

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About the Author

Hi all, I am Ankur Aggarwal – Digital Marketer, Entrepreneur, Traveller, Blogger, and Foodie. Have been blogging since 2010. In 2016 I scored 99.2 percentile in XAT Exam for MBA, left that to pursue my Online business dreams.
The purpose of ankuraggarwal.in is to pass on 100% accurate, genuine and FREE information on Personal Finance, Entrepreneurship, Investing, Career, and Learning Digital Marketing Online. Know more about me here: About Ankur Aggarwal

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