However, in India, acceptance was marred by hesitations and obstacles at every twist and turn, and people's interest in cryptocurrencies began to gain momentum only with the formation of the first cryptocurrency exchange in 2013. However, Since then, the growth of cryptocurrencies in India has increased. been really amazing with industry Estimates (May 2023) expect between 15 and 20 million cryptocurrency investors to own more than $5.37 billion in cryptocurrency holdings.
So for the average Indian the question arises; How should cryptocurrencies be considered or treated? Is it just another ideal alternative? investment option to boost someone's investment portfolio or has it matured into a real profit opportunity?
For the elderly investorStocks and bonds are the only things that mattered when it came to assets possess. Newer assets in the form of non-traditional assets such as mutual funds, ETFs, cryptocurrencies, forms of collectibles, precious metals, mortgage-backed securities, etc. have found gradual acceptance in the modern investor's portfolios.
Unlike traditional assets like stocks and bonds that often show movement in the same direction, alternative investments across asset classes have their own return cycle and ways of showing risk and reward. Cryptocurrencies are one of the fastest growing alternative investment options that reduce the level of risk and vulnerability in the event of a financial setback.
This is because cryptocurrencies do not react to economic factors as they are not controlled by sovereign banking or monetary authorities. For most, if not all, institutional investors, this is considered a huge advantage due to its reliability, decentralization, and efficiency. However, as the saying goes, there is no such thing as a free lunch. With the opportunity to change your fortune overnight there is also the dark side of all cryptocurrencies.
The underlying volatility of cryptocurrencies causes huge price swings almost in the blink of an eye, which is not good for any investment portfolio. Lately, external economic factors such as fear of recession, cyber fraud and theft, inflationary trends, and increased regulation have only served to increase this volatility.
While the wheels are in motion with the latest discussions that took place at the recently concluded G20 Summit, today in India there is no central authority or body that regulates trading, mining and transactions with cryptocurrencies as a means of payment.
Therefore, the risk is in the hands of the investor or the interested institution. The only regulation that the Government has instituted has been in the 2022 Union Budget the implementation of a 30% and 1% tax on the profits of cryptocurrencies and the tax deducted at source respectively as a first step to put regulations in place. the time to negotiate. in cryptocurrencies in India.
However, despite there being no force or authority to guide people on the pros and cons, cryptocurrencies have quickly gone from being viewed purely as an alternative investment option to a legitimate avenue of profit for investors. investors in all areas.
However, this is not easy and involves several methods to do the same. The change in mindset of cryptocurrency investors reflects the rapid increase in the intrinsic potential of cryptocurrencies. There are users who value the principles of decentralization and self-control, but the majority of investors have come to prioritize profitability. The recent bull run that cryptocurrencies have enjoyed in India following the Supreme Court ruling deeming the ban on cryptocurrencies unconstitutional encompasses both the former and the ability to make profits.
There are several ways to earn passive income through cryptocurrencies, including in India, using strategies like yield farming, mining, betting, and gaming to make money.
In yield farming, investors can make money by lending coins and tokens from their wallets to a pool with other investors. They are then used to lend to others at an interest rate and fees. An algorithm called proof of work (PoW) is the basis of the most popular cryptocurrencies, including some of the largest.
Under PoW, miners compete to find the encrypted solution to earn cryptocurrency as a winning reward. When it comes to gambling, cryptocurrency owners participate and receive fees as remuneration for the work done. There are many play-to-earn games that allow users to earn crypto tokens and coins as rewards for winning or crossing various stages of the game.
Given the rapid rise in the number of tech-savvy investors and the growing acceptance of cryptocurrencies as legal tender globally, it is no surprise that Indians have also jumped on the bandwagon in recent years.
Rapid advancements in financial technology and its greater acceptance are the main cause of the rapid increase in the number of Indians investing in cryptocurrencies and will continue to do so in the short and medium term future. Today, investments in digital currencies are a key part of the bullion market holdings consideration set, but Indians between the ages of 18 and 35 are more inclined towards investing in cryptocurrencies as a route to making a quick profit. and considerable. revenue accepting the risks that come with it.
