Things Investors Should Consider Before Buying Cryptocurrencies In India
Cryptocurrency is a topic that is too hot to ignore in India. The way it has powered through the market and recent investments is astonishing and it has created no less than a paradigm shift in the asset class of our country. There is a lot that we now know about cryptocurrencies but owing to the newer developments not only in the introduction of new cryptos but also in the modifications in the existing ones, there is a lot that still remains untapped. Every few days, there are newer cryptos are being introduced into the market. For example, people are now rushing to buy polygon in India as it is relatively new and there is a certain appeal growing around this particular crypto.
Based on what we do know, experts have come up with certain tips and points that every investor should consider before purchasing cryptocurrencies in India.
Identify the right cryptocurrency
One cannot stress the importance of this point as no two people investing in cryptos will have the same budget, same goals, same risk tolerance, same expectation of returns, etc. It becomes extremely vital for you to make a plan and identify the cryptocurrency that will help you reach your goals and minimize the risk. These can be done on several factors – the growth patterns and expectations in the future can be important considerations.
Checking the legitimacy
This might sound odd but is an important consideration as newer cryptos are being introduced to the market each day. Doing your due diligence and ensuring that you are checking for the genuineness and legitimacy of these cryptos, especially the new ones, is critical. If you are a part of authentic online exchange platforms you might be at a lesser risk of investing in scam cryptos, however, you can still check online for yourself.
Account for volatility
The investment prospects of cryptos are brilliant – the fast and huge returns are appealing to most. However, while the gains may be fast, so could the losses. The value of LTC to INR today might not be the same tomorrow. It is easy to get lost in the happy bubble of gains from cryptos, and not many people account for the equally fast reduction in prices. Even the so-called popular coins like BTC are not immune to these fluctuations.
Long or short-term
Your whole plan might change depending on this question. The amount you are looking to invest, the choice in cryptos, the time you will be devoting to trades, the risks, etc will be dependent on if you are looking to be in the market and are patient for long-term profits or if you are wanting to adopt a get-in and get-out methods hoping for faster returns. Both these prospects may have their pros and cons and it is an approach that you will have to carefully consider depending on your expectations and expert analysis.
Striking a balance
One of the first things that new investors, especially, are asked to do is to create a diverse portfolio. This helps them in mitigating the risks and losses if any. A balance between high-risk assets and stable investments is always a good idea, even if you have been in the investment game for a while. Additionally, you can ensure to invest only a percentage of your allotted amount into cryptos since the values might be volatile. Another approach regarding this could be – to invest what you are willing to lose.
Advantages of considering these things
The world of cryptocurrencies is not free of scamsters and tricksters. The internet is also filled with all sorts of misinformation that might lead people away from their actual goals. Therefore, anyone entering the financial sector is advised to do their own homework and research before making any move that might incur a loss. Adequate planning and building a strong foundation keeping in mind all the obstacles one might encounter would be another major theme before investing in cryptocurrency. One way to tackle these several issues could be to be a part of genuine online exchange platforms. Portals like CoinSwitch Kuber provide their millions of users with genuine information, best prices, and fast methods of trading with low fees. These platforms will take away half your worries about misinformation.
Taking these points into careful consideration would be the first and one of the most important steps in investing safely. Follow TechR for more!