A Crypto investment fund is today one of the cutting-edge ways to invest in digital assets. Despite the risk implicit in this type of new investment, every investor must know and consider it when entering the crypto space.
They represent the new generation of investment funds that emerged from the Cambrian explosion of cryptocurrency-based assets and companies. Here we explain what they are and how to invest in crypto funds in India safely and effectively.
Crypto funds are investment vehicles similar to traditional hedge funds, only that they operate with crypto assets directly or invest in companies related to cryptocurrencies and other digital assets.
However, in the countries where they are regulated, they are governed by slightly different rules than traditional funds. In some cases, crypto investment funds are legally constituted and facilitate investments for large and small investors. Through them, investors can buy shares and share the profits or returns with others as the fund’s value grows.
These funds have an excellent capacity for diversification since they offer products linked to Bitcoin and other cryptocurrencies. Likewise, they include in their portfolios digital assets and related businesses (exchange platforms, Defi, DAO, gambling, NFT, Metaverse). The rise of cryptocurrencies and their high returns has enabled the growth of crypto funds.
Through them, it is possible to configure a balanced investment portfolio, which helps mitigate the risk of direct exposure to cryptocurrencies in the face of their high volatility.
Cryptocurrencies have become assets desired by investors in India and other countries worldwide. Their growth is because they represent a value deposit and a refuge against inflation. Beyond the ups and downs of their volatile nature and the macroeconomic circumstances of the moment, they are the money of the future.
Investment firms created crypto investment funds to combat the risks of investing in a specific digital currency. Their job is to incorporate various assets into their respective portfolios and diversify them with others that are similar or not—for example, equities, precious metals, commodities, etc.
This reduces the risk associated with the investment. Thus, when crypto, such as Bitcoin (BTC) or Ethereum (ETH), falls in a bear market, the investment in the crypto fund allows you to keep said investment covered.
If Bitcoin falls, the profits generated by other investment assets will serve to cushion said fall. In such a way, the impact is always less because it is a diversified portfolio made up of several assets:
Being unrelated or inversely correlated, such assets appreciate over a given period. The purpose of a good crypto investment fund is always to design a sufficiently balanced and diversified portfolio. This is possible because, behind the crypto investment funds, there are professionals who know the market. They not only manage strategic information but apply proven investment strategies.
There are several types of crypto funds whose portfolios are direct or indirect investments in digital assets.
Investments in cryptocurrencies have been growing by leaps and bounds. In 2021 around 20 million Indians decided to get involved in crypto-related business and assets, according to The Economic Times.
Cryptocurrency exchange WazirX, for example, saw trading volume through its platform grow to some $43 billion last year in India. With a record growth of 1,735% since 2020, it is at the highest level in the country.
As for the crypto funds in India, they are taking shape, although they are not yet fully regulated. Fortuna Capital is India’s first true blockchain, cryptocurrency and digital asset fund, headquartered in Mumbai.
However, other cryptocurrency investment platforms offer the SIP (Systematic Investment Plans) function, through which it is possible to invest several sets of coins.
The only limitation is that most of these services offer short-term investment options (daily, weekly and monthly). Instead, crypto investment funds themselves have long-term benefits. At present, there are no crypto funds in India that offer SIP-like solutions for investors.
A variety of investors participate in crypto funds. They invest their money in digital assets with high growth potential or already consolidated virtual currencies, which have proven their strength over time and always offer high returns, as mentioned before.
Although anyone can invest in a crypto fund, it usually requires significant initial investments placed by investors with greater capacity to contribute higher volumes of capital.
The teams that manage these funds are generally small and highly skilled from a professional and operational standpoint. There are crypto investment funds that only allow the participation of high-end investors who participate with high minimum investments.
However, there are also funds created especially for retail investors who can start their investment with very little money. They often offer proprietary products or token investments tied to the portfolios of other investors.
In the case of crypto funds in India, Fortuna Capital – a leading crypto fund, the investors are high-net-worth resident Indian citizens and non-resident citizens. Foreign nationals, corporations, family businesses, individuals, HUFs, limited liability companies (LLPs) institutions and crypto funds from abroad also participate.
As digital finance grows and more and more people in the world adopt cryptocurrencies, these new forms of investment have emerged. One of the reasons why more people every day invest in crypto funds in India is because of the security they offer.
Being run by professional managers and having a legal business status, these funds offer a sense of trust and quality execution to the investor on their crypto investments. Although all crypto funds promise a good return, you must be aware that nothing is certain in this type of business because they are risky investments.
Another reason why people invest in crypto funds is because of the transparency of the investment. Periodically, the investor receives a detailed report of his investment that allows him to monitor the portfolio.
The main feature/benefit of crypto investment funds is the diversification of the portfolio and the protection they offer against inflation. That makes them a very attractive business model in the crypto space. Crypto funds in India will be looking forward to bringing forth the best of the traditional and cutting-edge investment portfolios for these digital assets to fulfil the needs of the market.
As with traditional hedge funds, investors in crypto funds must commit to keeping their money invested for a specific time without being able to mobilize it, depending on the investment strategy followed by the fund.
When the asset or assets that are part of the portfolio grow enough, they are sold in the market, and each investor obtains profits in proportion to their investment.
First, the investor must comply with the mandatory customer identification requirements required by law (KYC). A valid identification document and the client’s personal information (address, mail, phone) must be provided.
Then it is necessary to sign the Contribution Agreement with the fund where the investment details are indicated. That is, the amount of money you commit to investing, service fees, and performance-based fees. The risks associated with the investment are mentioned in the contract.
When a crypto fund is chosen, you, as an investor, have a high degree of trust in that firm and its managers. So before deciding on the crypto funds in India, carefully study its service offering, the products it offers and the strategy, it will apply to multiply your money.
Cryptocurrency trading platforms have multiplied in recent times. If you are a beginner, you may feel a bit hesitant in diving into this space. Here is the quick guide on cryptocurrency trading for beginners to familiarize them with the trading essentials.
There is no physical exchange platform as such. You need to open an online crypto trading account to start. Exchanges like WazirX are quite easy to understand and setting up account is a real quick process.
It is entirely up to the traders. The cryptocurrency experts in India can be of good help in understanding the correct investment amount. They understand from the investors the time horizon, areas of investment of their interest, returns expected, risk appetite, etc. Accordingly, they suggest the amount to put aside for trading in cryptocurrencies.
Diversification is the best strategy for cryptocurrency trading for beginners. They can mitigate the risk and spread it across various avenues to have the overall returns on the plus side. Some of the promising avenues that are making place to discussions surrounding crypto trading are tokens, NFTs, gaming, entertainment, Layer1 and Layer2, real estate, high crypto yield products, etc.
The cryptocurrency space has become enriched since its inception. Hence, there is ample data available to the cryptocurrency experts in India for suggesting the correct strategy. A few of the promising and safe strategies are:
All these are the basic things to know if your instincts are taking you to trying crypto trading. The cryptocurrency experts in India can provide you with the right support as a beginner and instill you with confidence.
An accomplished digital asset fund manager can tell you the best areas of investment for crypto mutual funds. One such advisor is available at Fortuna Capital that has launched the first crypto fund in India. It is quite likely that with increase in number of players in crypto assets market, you may find people discussing about the Crypto Index Fund India sooner.
Take a look at these top investment areas that have the potential to be the part of the first Crypto Index Fund India:
All these areas have shown promising increase in value with time. The digital asset fund manager can suggest you the investment baskets that they develop after decoding the algorithms and studying the performance patterns. Join the first crypto fund of India at Fortuna where these avenues are available for diversification.
The safest cryptocurrency investments are those that bet on the long term. This article explains how to maintain savings in digital assets based on a long-term investment strategy. We also discuss the best long-term investment strategies and how to identify the best cryptocurrency to invest in.
Saving in crypto is similar to what you do with traditional money: Indian rupees, euros, dollars or British pounds. Cryptocurrency trading makes buying, selling, storing/saving, exchanging and transferring digital currencies as easy as a click.
To start doing so, you need to open crypto savings account on a secure and reliable exchange platform in India. Then buy the cryptocurrency you choose to deposit into your crypto savings account.
Saving in cryptocurrencies is the easiest way to raise the rate of return on your money in the medium and long term. But first, you must map out a proven efficient cryptocurrency investment strategy. If you are getting into cryptocurrency trading, it is vital to do it with a professional.
The investment strategy is essential in increasing the chances of getting a better return on your crypto investments. It is critical to know that Crypto Currencies do not have sovereign backing and, therefore, can also turn worthless. Remember that these investments are not protected by law. Consequently, it is wise to understand the pros and cons of these venture investments before you start investing in digital assets.
Crypto exchanges offer cryptocurrency savings alternatives from Bitcoin and well-known newer Altcoins. The saver obtains a rate of return for their investments, depending on the cryptocurrency they choose to save.
The investor must learn to identify which cryptocurrency has the best potential for investment. Most of the money a fund generates is via its best long-term crypto investment holdings. They must be time-tested cryptos that have withstood depreciation and the volatility that the market generates.
Several cryptocurrencies have proven their strength over time. They are mature or consolidated projects that have significant financial backing behind them. Some of these cryptocurrencies have not stopped appreciating over time despite the vagaries of high volatility. But such projects are few, and the time scale of the investment matters.
You have to know how to identify the advantages and disadvantages of cryptocurrencies with each other to weigh a good investment. As part of the long-term cryptocurrency investment strategy, you should analyze several factors or elements when choosing the proper crypto for your investment. Over the last few years, some of the best long-term crypto investments have been into the infrastructure layer of the crypto space. Layer0, Layer1s and Layer2s like BTC/ETH/SOL/AVAX/POLYGON have generated massive returns.
Average investors in India do not have much money to spend on these investments. However, some of the most expensive ones are also the safest as an investment, esp BTC or Ethereum. Price on its own, however, is not an indicator of the coin’s potential. Some of the best long-term crypto investments could be BTC/ETH, which are already at high prices. For example, ones like Polygon/Matic are at much lower prices.
The cryptocurrencies with a growing volume of transactions have the best market prospects in the future. Volume is a valuable indicator to verify the interest of a digital asset at that moment and make future projections.
Growth and adoption
Crypto adoption potential and its performance since launch is another important indicator to keep in mind in long-term cryptocurrency investment strategy. Adoption is associated with the credibility generated by the digital asset due to its consistency and underlying technology.
It is critical to choose crypto because almost all digital currencies have a maximum supply. Upon reaching the emission limit, usually through mining work, it is assumed that there will be no more production of new tokens. Some cryptos have a built-in mechanism to burn or remove their cryptos from circulation. This action of burning a coin/token decreases the available supply and acts as tends to push up the price.
Other essential factors to consider to identify the best cryptocurrency are:
Community: Monitoring the cryptocurrency through its community shows the genuine interest of its followers in the asset. In the forums, there is much information and critical opinions about the solidity of the project. They are also a source of permanent consultation to know in which direction it is going. Some of the best long-term crypto investments tend to have a strong community aspect for the development of the protocol as well as its users.
Fundamental analysis: It is related to the technical bases of the investment. It is the analysis carried out by traders in the stock market to study an asset. It is used to calculate the behaviour and the theoretical price of the asset in the market.
The project team: Who is behind the cryptocurrency is a must to foresee its course—the team’s experience, philosophy, goals, ambitions, etc. The reputation of the project largely depends on this. Some of the best long-term crypto investments are made on the backs of legendary teams. For example, Polkadot (DOT) was a project by Dr Gavin Wood, also the co-founder of Ethereum. Early ICO investors made around 150x of their investment
Technology. It is a crucial factor that contributes to the success of a cryptocurrency project and leads to an effective cryptocurrency investment strategy. The technology behind crypto represents one of cryptocurrency’s most important advantages (or disadvantages) over its competitors.
White book. A white paper usually accompanies the launch of a new digital currency. There, the purpose of the cryptocurrency, technology, operation and general vision of the project are described. To successfully evaluate a cryptocurrency, it is imperative to read and analyze its white paper.
Until now, the best long-term cryptocurrency investment strategies are based on cryptos such as Bitcoin (BTC), which has proven to be a very profitable investment throughout its history. Similarly, Ethereum (ETH) is due to its versatile blockchain and the professional team behind the project. Along with other successful cryptos in long-term investment plans such as Chainlink (LINK), Polkadot (DOT), Uniswap (UNI), Solana (SOL) and Binance Coin (BNB), to name a few.
The key to maintaining a healthy and profitable investment portfolio is diversification. That raises the odds of profit if you’ve kept your portfolio balanced throughout the investment period. One of your goals should be to build a long-term crypto portfolio that outperforms other asset classes. By being conscious of your choice, you can invest in high quality crypto assets that can stand the test of time and appreciate to give you very good returns
Digital currencies are an excellent option to diversify the portfolio and capture sudden movements in the crypto market. But they are also for long-term gains by letting crypto with historical returns continue its growth cycle.
Of course, cryptocurrency is a more risky investment asset class than any other market asset class. Just as there is the possibility of losing the money invested, it is also possible to obtain high returns in a given period.
Diversifying the investment portfolio is as important as choosing a cryptocurrency that offers security and certainty for our investment. The long-term cryptocurrency investment strategy has the advantage that it is a safer investment, less expensive and easier to plan.
Having a long-term plan is a recommended cryptocurrency investment strategy. The investor expects an increase in the digital asset’s price for a reasonable period. This period usually ranges from six months to a year. But it could also be for several years, according to the strategy outlined by the investor. At the end of the period established for that investment, the investor sells the assets and strategically withdraws the earnings on the investment. You can then wait for the price of that or another cryptocurrency to drop again to buy low and roll over your investment, hoping the price will rise again.
The long-term investment plan can be developed in parts or successively. As long as they have their money invested, long-term investors can earn interest on the digital currencies they hold in their investment portfolio.
Some platforms offer high returns (12% and more) to the saver for accumulating cryptocurrencies and keeping them for a particular time in the contract.
The benefits of holding a long-term crypto portfolio can be summarized as follows:
Here are some of the most common long-term cryptocurrency investment strategies:
Buy in Initial Coin Offerings (ICO)
It is simultaneously one of cryptocurrency’s riskiest and most productive long-term investment strategies. They are very speculative bets made by professionals and more advanced crypto investors. This strategy requires a lot of experience and a remarkable ability to identify a diamond in the rough.
Buy the Dips and Hold
It is another very successful strategy that requires extensive crypto market knowledge. Any novice investor might believe buying when crypto is down is wrong. However, that is just the time to enter the market and start trading. A good strategy for your long-term crypto portfolio might be accumulating blue chips like BTC/ETH at lower prices and holding.
When it is a solid digital currency, drops caused by events, news or speculation do not last long. Savvy crypto investors buy when the market is down (undervalued) and sell when it is up (overvalued). The strategy of “buy the dip” does not require daily monitoring of the asset, nor does it cause significant expenses to the investor.
Dollar-Cost Average (DCA)
It is one of the most used cryptocurrency investment strategies by investors as it reduces the impact of cryptocurrency volatility. It consists of progressively investing a specific amount instead of doing it all at once. DCA is one of the best strategies to employ with your long-term crypto portfolio. Just be conscious of betting on the blue chips. Altcoins tend to crash faster than the blue-chip ones during a bear run.
This strategy also allows you to maintain a fixed investment in cryptocurrencies and withdraw profits periodically according to the returns. The investor invests his money in both rising and falling markets.
Finally, it is worth insisting that you should always consider the risk in any investment strategy in cryptocurrencies. But playing for the long term, as has already been explained, has more significant benefits for the investor and lesser risk. Therefore, it is one of the best long-term crypto investment strategies.
This article explains everything there is to know about trading cryptocurrencies in India. Getting into cryptocurrency trading in India can be challenging because it is an uncharted area for many people. But, as you study, know and get advice on blockchain technology and how it is revolutionizing the financial sector, you will be able to understand its potential.
Every day, more people join the crypto universe in search of investment opportunities and profits. So if crypto trading catches your eye and you want to start immersing yourself in this topic, read on.
Cryptocurrencies, also known as digital currencies, are a means of payment since they fulfil the same function as money. In addition, they represent a new investment option in the market as a valuable asset. These assets can be simply traded (purchase-sale), held or traded as cryptocurrency futures on the crypto exchange.
Since the creation of the first cryptocurrency (Bitcoin) in 2009 by Satoshi Nakamoto, whose true identity is unknown, cryptos and cryptocurrency trading have not stopped growing worldwide. To the point that today there are already some 17,000 different versions of cryptocurrencies operating in the market.
Digital currencies are created from a complex mathematical protocol through the blockchain. This encrypted network or accounting ledger allows for keeping a secure, decentralized, synchronized and distributed record of digital operations. Cryptocurrencies are mined or created; they are added to the blockchain network. The blockchain protocols are decentralized, and experts can review the codes. This ensures that some of the cryptocurrencies are independent and do not require the intermediation of third parties, as is the case with fiduciary money. However, lately, governments are working on creating their digital currencies, the CBCDs (Central Bank Digital Currencies).
Cryptocurrencies are classified into several types: Bitcoins, Altcoins and Tokens.
It is the largest cryptocurrency in the world by market capitalization. It allows you to make electronic payments without the need for financial intermediaries such as banks or other traditional payment platforms.
Since its launch, the trading of bitcoin (BTC) and cryptocurrencies, in general, has grown a lot. BTC became a payment alternative (houses, cars or other goods) and an investment option that boosted cryptocurrency trading in India.
They are alternative digital currencies to bitcoin, hence their name (alternative coins). Each of these coins is also based on its blockchain technology and has different applications. Altcoins operate independently on their blockchain or distributed ledger technology (DLT) networks.
By having their technology, all Altcoins compete with each other to attract more enthusiasts who invest in them and support their development and growth. The top altcoins include Ethereum, Litecoin, Ripple (XRP), Bitcoin Cash, Binance Coin, Cardano, Solana, and more.
Lastly, in the crypto universe and crypto trading, there are tokens. Although they are also cryptocurrencies, they do not work within the blockchain network of another cryptocurrency. In other words, the tokens do not have their blockchain. However, Ethereum does host other cryptocurrencies such as USDCoin, Chainlink, Tether (USDT), Neo (nash and gas) or Tron (BitTorrent) on its network.
Similarly, tokenization is all the rage in cryptocurrency trading and other digital assets. Tokenization is also being applied successfully in trading other non-digital assets such as commodities, fiat currencies or properties.
Cryptocurrency trading in India has been gaining popularity due to its rapid adoption among people, professionals and institutional investors. Fundamentally, cryptocurrency online trading is really where you trade.
Crypto trading encompasses the direct buying and selling of crypto through a crypto platform, online peer-to-peer (P2P) cryptocurrency trading, and futures contracts for Bitcoin and other cryptocurrencies, which you can purchase through a mutual fund that invests in cryptocurrencies.
One of the fundamental characteristics of cryptocurrency trading is obtaining returns from price fluctuations during a specific period. Traders analyze the price movements of cryptocurrencies in the market (up or down) and forecast the variation over time. The profits are proportional to the volume of the trade carried out.
In online cryptocurrency trading, price fluctuations are constant, as is high volatility. The crypto investor can take advantage of this volatility to increase the performance of his operation. Some prefer to trade short and make immediate profits; others play long term.
Investors who want to get started in crypto trading should first prepare themselves on how to trade cryptocurrency in India. This requires first studying the market, developing an effective online cryptocurrency trading strategy, and then opening an account with a crypto exchange.
Before starting cryptocurrency online trading on a crypto platform, investors should know that cryptocurrency trading in India is not entirely regulated. Therefore, trades are made at the risk of the investor himself since there is no protection from the state or the nation in case of loss of money due to bankruptcy or fraud of the crypto platform used. You will have heard of users making a lot of money through cryptocurrency online trading, but countless users have lost all of their money by trading rashly. Using leverage for trading crypto is one of the biggest no-nos for an early or beginner trader, because it is one of the fastest way to get your account liquidated
Hence choosing the best Indian crypto exchange for beginners is a crucial task. Especially if you are just starting in the crypto space. India has several safe, liquid and reliable crypto exchanges with affordable fees. These companies offer a good user experience, and you can start trading with little money.
The biggest and best exchanges trading cryptocurrencies in India include WazirX, Coinbase, CoinSwitch Kuber, Unocoin, CoinDCX, Zebpay and others. Each has its pros and cons, depending on the investor’s cryptocurrency online trading needs.
The purchase-sale of digital currency is the exchange of one crypto for another. The process is straightforward, similar to FOREX or purchase – selling one currency for another (Indian rupees for dollars, for example). You are looking for a pair of cryptocurrencies to exchange or a cryptocurrency for a fiat currency.
Traders can do cryptocurrency trading in India through the exchange of their choice. Or, as mentioned before, two traders agree on a peer-to-peer market to directly exchange two types of cryptocurrencies through their respective virtual wallets.
For trading cryptos, it is necessary to have already opened an account in a crypto exchange or a wallet to store your funds. Opening an account on an encryption platform is also a straightforward process. You must fill in a series of requested user personal data and then choose the cryptocurrency and buy it.
Most exchanges accept payments in Indian rupees or cryptocurrencies to facilitate buying and selling. After buying the chosen cryptocurrency, you can transfer it to your wallet and dispose of your funds as you prefer whenever you want.
For proper management and use of cryptocurrencies in India, it is essential to keep these digital assets stored in safe places. You cannot entrust your money to any platform, so you must also choose a secure wallet.
Expert recommendations on how to trade cryptocurrencies in India safely state the need to adopt measures to avoid theft or scams.
After reading this complete guide on trading cryptocurrencies in India, you will have a complete picture of this critical financial option that generates high returns. Cryptocurrency in India has become an essential financial instrument in any diversified investment portfolio. Take your initial steps carefully and do comment on the article if you need a more detailed guide on how to trade cryptocurrencies in India.
Futures are investment instruments dating back to the 19th century (Chicago, 1848). They are used for trading the future price of raw materials, shares on the stock market, stock market indices and currencies, including cryptos.
So they operate under a concept very similar to stock market indices or derivative contracts in the market. They allow the crypto trader to take risks related to the future value of a digital asset. Therefore, a cryptocurrency futures contract’s value is a derivative of the digital currency it represents: Bitcoin, Ethereum or any other crypto asset.
This article will explain how you can start trading cryptocurrency futures, its risks and the practical tips you should follow to have a more positive experience.
The hallmark of any good crypto trader or investor is to have a working crypto futures trading strategy. Cryptocurrency derivatives offer the crypto investor the opportunity to speculate on its future price in the market. It is a financial product with the potential to expand opportunities and strengthen the cryptocurrency portfolio through leverage or capital provided by the broker/platform for trading.
Leverage allows capital to trade more efficiently because the crypto trader can trade positions higher than the quantum of funds required. In this way, the investor obtains a greater exposure in the market and only disburses a part of the total value of a position.
In addition, it allows to increase yields but also potential risks. In the same way, they serve for the investor to protect his portfolio or use it as a hedge when his investments in other digital assets trend in the opposite direction.
You can go long for the price of the cryptocurrency to rise or go short and anticipate a possible drop in its price. Before you start trading cryptocurrency futures, create your crypto futures trading strategy by looking at the below five essential tips from the experts
1. Adopt a trading methodology
It is crucial to adopt a cryptocurrency trading methodology that is appropriate for you. It’s not just about watching a few videos of cryptocurrency influencers telling you what to do. Remember that there are no unique or exact recipes in these markets since each trader is different. The trader should adapt the trading style to the objectives and personality traits of the investor (mentality, lifestyle, risk tolerance).
2. Develop a trading strategy
A good business plan always helps the investor to manage risk better. At the same time, it contributes to improving the consistency of the trading strategy. The trading plan requires a detailed design on entering and exiting positions.
Three fundamental aspects are entry and exit indicators, position size and where to place stop losses. There are many advantages of developing a trading strategy to take care of the investment and avoid headaches.
3. Carry out proper risk management
Proper Risk Management is the most critical part of the equation for trading cryptocurrency futures. Risk management begins with setting limits on losses on a trade. Knowing your risk tolerance is vital to trading sensibly and not risking beyond the allowed limit.
While trading cryptocurrency futures, stop losses should be sacrosanct. Losing 10% of your capital is the outer bounds of risk you should take. Your goal is first to protect your money and then gain returns. This will help you value your money accurately, trade carefully and protect your investment.
It is not about risking everything in a single trade but having a long-term vision and strategy. For the beginning crypto trader, it is better to earn little consistently than to expect to fill up in two or three trades. This way, you can build a good cryptocurrency account and portfolio.
4. Trade responsibly
Protecting capital by trading with realistic and responsible expectations should also be part of the trading methodology. You have to control your emotions because compulsive trading induced by emotions only ensures unfortunate losses.
The trader’s instincts indeed count when investing, but you have to be measured. Trading the cryptocurrency market on lucky streaks without any technical reading or data to support the investment is not only risky but can lead to bankruptcy.
To operate responsibly, you have to control your emotions. The way to mitigate these risks is:
5. Study constantly
Nothing is as healthy for the crypto trader as constantly learning. And the only way to achieve this is by studying and consulting with the most experienced trading professionals.
Staying informed about new and old crypto projects is vital. You have to be up to date on what’s new in the blockchain. Likewise, read about the evolution of the crypto industry, regulations in India and the world and everything that implies adding data to the analysis to invest with criteria.
Similar to oil or metals futures trading, Bitcoin or Ethereum futures are financial contracts between two parties, a buyer and a seller. They both agree to make a trade on an underlying market and set a fixed price for that cryptocurrency at a future date.
The buyer is obligated to buy the underlying market, while the seller is obligated to sell the digital asset on or before the expiration date of the contract.
In the cryptocurrency futures market, there are three participating players: speculators, hedgers and arbitrageurs.
Crypto investors can choose from a wide variety of markets to trade cryptocurrency futures. There are several of them regulated like the one in the United States and some that are not like India.
In the US, Bitcoin futures are listed on the CME, a designated contracts market (DCM) and derivatives clearing organization (DCO). Both the trading and clearing of Bitcoin futures are regulated by the Commodity Futures Trading Commission (CFTC).
Investments in cryptocurrencies carry certain risks due to price volatility. Even more so in the futures market. Among the most significant risks of cryptocurrency futures trading for your assets are:
Cryptocurrency price manipulation: Unlike regulated securities markets, some countries have no efficient mechanisms to prevent price manipulation.
Liquidity: Some cryptocurrencies do not have the necessary liquidity on exchanges or on the chain. This is especially true when the cryptocurrency has minimal circulation among retail or professional investors.
Use as a method of payment: Cryptocurrencies are not yet recognized as legal means of payment in contrast to other digital means, except in El Salvador or the Central African Republic. Although many businesses do accept them, their acceptance is not mandatory.
They are very volatile assets: They do not allow them to be used as a unit of account and store of value, unlike fiat money (INR, dollar, euro, yen).
Its cross-border nature can be a problem: The companies in charge of issuing, guarding, and trading cryptocurrencies are not located in India. In many cases, it is not even known where they will be able to resolve any legal conflict.
Susceptible to theft, fraud or loss: Blockchain technology is secure, but how individuals manage their wallets is an area of concern. There is a risk of loss or hacking of private keys is prevalent. Whether you forget them, manage them personally or are in the hands of third parties.
It is an option to speculate on digital assets to achieve higher profitability. This activity consists of taking advantage of the difference (spread) of prices of cryptocurrencies between the different exchange platforms in India. Prices vary as a result of the supply and demand of crypto assets. This is a well known and established crypto futures trading strategy.
The cryptocurrency arbitrage strategy is possible because digital asset prices vary from one exchange platform to another. Thus, the trader can make a profit with the price variances he detects in the market to buy and sell cryptocurrency futures.
Generally, exchanges with more liquidity offer better prices. At the same time, those with less liquidity have higher prices. These environments are not exempt from fraud and scams either.
For a better experience with futures contracts, the beginner should keep the following in mind when investing:
Cryptocurrency futures allow you to trade with leverage, and various options exist for sophisticated investors or traders. Building your crypto futures trading strategy is one of the ways to build your expertise and success in the market. It goes without saying that this is a very high-risk venture for a beginner; especially trading with leverage can be harmful to your P&L account.
In this article, we will explain step-by-step how to invest in cryptocurrencies in India.
If you are starting, you need to consult an expert who can safely guide you on how to invest in cryptocurrencies in India. Various exchange platforms, brokerages and crypto funds help you manage your digital currencies.
Knowing where to invest, how to buy cryptocurrencies, where to store them and how to trade them is crucial if you hope to invest in cryptocurrencies in India for good returns in the short, medium or long term.
Cryptocurrencies are a type of digital asset issued through the blockchain that guarantees their ownership and assures the holder of the integrity of the transactions carried out on the network. This particular function or feature allows you to control the creation of new units, preventing counterfeits or copies from being made.
As digital currency does not exist in physical form, it is necessary to store it in a digital format, i.e. either a hardware wallet or a software one. In addition to keeping digital money, this software allows you to receive and send cryptocurrencies safely and cheaply. You have to be very careful with the wallet you choose and the keys to be able to access it.
Cryptocurrencies have very particular characteristics that differentiate them from traditional or fiduciary money. Digital currency transactions do not require intermediaries or depend on governments. However, a shared accounting record of each transaction in the blockchain is maintained.
So far, digital assets are not yet fully regulated in India, so they are not yet recognized as means of payment. However, some companies and people use cryptocurrencies to carry out commercial operations. However, some stores and businesses in the country accept payments with cryptos.
As cryptocurrencies are not regulated in India, there is also no financial deposit or financial guarantee fund. So if the investor loses his money due to the bankruptcy of the exchange where he invested his money, he has no guarantee of seeing it again.
To invest in cryptocurrencies in India, you must choose one or more cryptocurrencies of your choice. In addition to Bitcoin, Ethereum, Tether, Polkadot, and, there are hundreds of digital currencies to choose from. According to the criteria and investment strategy of the trader or investor.
Then, you need to choose an exchange platform or any other option that you consider safe to buy cryptocurrencies and start trading with them.
You can buy crypto in India despite it not being fully recognized by the government. Cryptos can be purchased on a crypto exchange. There are a few in India, but for beginner investors, it is advisable to choose a safe, easy-to-use, low-cost option.
Some of India’s most trusted crypto platforms are WazirX, Coinbase, Unocoin, ZebPay, CoinSwitch Kuber, and CoinDCX, which provide all those advantages to the novice investor. You then need to choose the payment option you prefer to buy cryptocurrencies.
The exchanges allow you to make bank transfers, credit/debit cards, use the UPI payment system, Mobikwik, or pay directly through a digital wallet with cryptos. Some of these platforms offer the trader the option of a peer to peer (P2P) market. Multiple sellers make offers of cryptocurrencies at a specific price. The payment method varies depending on the seller, but it is pretty flexible. In our experience, most P2P Trading happens using the UPI payment network. The fees charged by the platform vary depending on the type of cryptocurrency and the transaction amount.
To start trading and investing in cryptocurrencies in India, you need to follow a few steps. Almost all cryptocurrency exchanges have more or less the same protocol.
1. Log in to the exchange website of your choice or download the app on your phone.
2. Open an account by completing the identity requirements (KYC) requested by the platform.
3. Configure the account according to your preferences/needs.
4. Choose a cryptocurrency trading strategy. You may already have one that you use to trade other assets (stocks, bonds, commodities).
5. Choose the cryptocurrency or group of cryptos you want to buy for investment.
6. Define the quantum of funds you allocate to Trading or Buying.
7. Store cryptocurrencies.
The platform will show you the digital currencies it accepts to purchase: bitcoins, tether, native exchange tokens, stablecoins and more.
Here also note that you can buy the digital currencies directly from the exchange or through other sellers using the peer to peer option.
Cryptocurrencies, once purchased, can be stored on the exchange or in a digital wallet. When the trader or investor frequently operates in the market, he usually holds them on the exchange itself.
On the other hand, if you buy cryptocurrencies intending to store them aiming at a medium or long-term strategy, it is better to have them in a digital wallet. There are different digital wallets, some more secure, practical and accessible than others.
Digital wallets store the private keys that allow the investor to access their crypto funds. So, you can send and receive any cryptocurrency you have bought and deposited in the wallet. Some of the well-known hardware wallets are made by Trezor and Ledger.
One of the principal risks of investing in cryptocurrencies in India is the high volatility of this market. Before starting to trade crypto assets, it is advisable to understand the associated risks fully.
The truth is that all financial assets that are traded carry a high risk due to the use of leverage, manipulations and unethical trading techniques or market volatility.
But the cryptocurrency market has an even greater risk due to a series of factors that we mention below:
High volatility. Unexpected changes or “black swans” in market sentiment often cause sudden fluctuations in the price of a cryptocurrency. Recently, the value of cryptocurrencies has suffered sudden and intense falls and unexpected and very high gains.
Lack of regulation. By not having a legal basis to support them, cryptocurrencies largely depend almost exclusively on the market’s confidence. Although the regulation process is underway in nearly all countries, including India, there are still no laws regulating this type of investment and operation.
Vulnerability. Cryptocurrency trading platforms where digital currencies are stored or transactions are made susceptible to cyberattacks. No exchange platform completely avoids technical failures, cyber-attacks, or human error.
Forks / interruptions. These are two other risks involved in trading cryptocurrencies. Forks, hard or soft, are changes or misalignments in network protocols, while outages are caused by design errors, hacks, and lack of capacity.
Highly speculative market. There is very sudden price jumps (gapping) up and down in a short time due to rumours, news or events and not necessarily due to supply and demand effects.
Now that we have shown you in an introductory way how to invest in cryptocurrencies in India, we recommend that you follow the following tips.
1. Before investing in cryptocurrencies in India, analyze the market. Learn to read charts with price movements like a professional trader. A proper reading of charts shows us the performance for years, months and days of the cryptocurrency you plan to invest on.
2. Seek advice from a cryptocurrency expert to help you better understand this investment area. Professional advice saves us unnecessary money losses and helps us better navigate the investment we are making.
3. Adopt a proven strategy or a combination of strategies to trade with a higher guarantee of success. Here again, the teachings of an expert are crucial to advance more quickly in this type of business.
4. Use an efficient trading style. To choose it, you must consider the technical aspects and the type of risk appetite. Now that you know how to invest in cryptocurrencies in India, you have a better judgment to start trading prudently in this promising market.
Any trading in a community, currency or stock is a risky proposition. Along with returns, you need to be careful about your exposure and your ability to manage risks. Whether you are involved in stock trading, commodity trading, or the cryptocurrency industry, you should always take safe steps to minimize such risks.
Cryptocurrency trading has opened up a wide range of possibilities to new and old investors worldwide. In India, cryptocurrency experts always advise the best crypto traders to adopt proven effective trading strategies.
Only then you will be able to start your journey to the crypto space more safely and securely and maximize the chances of obtaining higher returns on your investment while not losing your capital.
There are five basic trading strategies with any type of currency, including cryptocurrencies: scalping, day trading, swing trading, position trading and trend trading.
They all depend on the time and duration that the trade will remain open. Below we briefly explain each of these strategies recommended by cryptocurrency experts in India:
It is a form of high-frequency intraday trading, and its goal is to make small profits over a high number of trades. It requires opening online positions that present a trend, where the crypto trader will enter and exit the market several times, depending on its oscillations and the proposed trading strategy.
This is a short-term trading strategy where trades are made in minutes or seconds. This strategy is used to trade highly volatile assets, precisely like cryptocurrencies, efficiently. Profits from scalping are made when the market moves favourably, and the crypto trader quickly closes a position when the market takes a different direction.
This short-term trading strategy also consists of opening and closing trades on the same day. Thus, the trader will be able to make faster profits according to intraday price movements.
The best crypto trader will avoid incurring higher costs by not keeping positions open when the markets are on 24/7. It also minimizes the risks that arise while you are not keeping an eye on overnight market movements.
However, it is a strategy that requires thorough analysis and attention. It means dedicating the necessary time to observe open positions and the course of the market.
It is focused on playing with the price swings that occur within the same trend. This strategy pursues the maximum use of market volatility by carefully observing the upward or downward movements as a trend evolves.
Swing trading is a strategy for the short and medium-term that offers the trader many more profit opportunities. However, it is less likely that you can trade precisely at the moment when the price movement is at its highest or lowest.
It is often necessary for a partial trend reversal to occur in order to identify a new trend reversal or swing. This strategy requires that the trader fully understand the reading of the technical indicators and the factors that cause movements in the markets.
Trading with trends
It is a highly recommended trading strategy by cryptocurrency experts in India. It consists of opening a position online following a trend, as occurs with scalping. However, to maximize profits, instead of opening and closing positions, the investor needs to keep the position open for as long as possible during the price movement.
It works as a short, medium, and long term trading strategy as trends develop over a set period. It is also necessary to have a solid knowledge of the functioning of the market. Manage technical indicators and analyze the environment to identify any emerging trends.
Investors look to spot long-term price movements to try and make the most profit when the price of the asset fluctuates. Consequently, they are operations that can last months or years.
Position traders and top crypto traders often do weekly or monthly chart-based price analyses, allowing them to make a detailed assessment of markets. They use both technical indicators and fundamental analysis to be able to determine when to enter or exit.
Investors do not need to be monitoring their positions because they are not worried about the ups and downs of the market. They only do it occasionally to ensure their investment is going in the right direction.
However, the cryptocurrency experts in India mention other additional trading strategies that the crypto investor can use.
The automated cryptocurrency trading strategy requires appropriate software that executes the orders dictated by the trader. The complexity of the system used will depend on the degree of preparation of the investor. So they can be very simple or quite complex. Many of the software is customizable by the trader for optimum results.
Automated trading can allow the investor to monitor the markets during the day permanently. Trades can be opened or closed at the right time to reduce risks while the trader is away.
For proper use of these systems, the investor needs to supervise them properly. Although they are pretty reliable software, they could fail due to various points of failure at any moment and generate an unwanted loss for the investor.
Best crypto traders consider “dollar cost averaging” (DCA) a very safe strategy. The DCA consists of investing a fixed amount of money during a certain period.
In this way, the crypto trader does not have to be synchronizing their systems with the market to make long-term profits. But this strategy has a disadvantage for the rookie investor that it requires an excellent study of market trends and cycles.
Before taking a call, you need to monitor oversold and overbought areas of the market closely. Likewise, it is essential to take regular readings of the technical charts to leave a position at the right time.
It refers to the strategy followed by the best crypto trader to buy cryptocurrencies in one market and sell them in another. Take advantage of the difference between the purchase price and the price known as ‘spread’.
Investors can profit from trade because of liquidity and trading volume difference. Cryptocurrency experts in India state that the way to take advantage of this opportunity is by opening accounts on the best cryptocurrency platforms in India. The price differences between the cryptos operating at that time are shown.
Bet on Bitcoin volatility
Some of the best crypto traders also make bold moves to boost their profits. Of course, this requires a healthy dose of confidence in what you are doing.
Bitcoin (BTC) is one of the most volatile virtual currencies. There are sessions in which BTC prices have varied up to 30%. Buying in a bear market (Buy the dip) can bring significant profits to the investors, and if the trend goes the other way, it can create substantial losses.
One way to bet on volatility is to trade Bitcoin futures. A call and put option is purchased on the same cryptocurrency ETF. Volatility traders bet on a cryptocurrency expected to rise or fall over a specified period.
Cryptocurrency experts in India also warn about the advantages and disadvantages of this type of investment. They depend on the time established for said investment and the objectives pursued by the crypto trader.
some of the best crypto traders in the world have found it beneficial to invest in crypto assets in the long term. Especially in the world’s largest cryptocurrencies by market capitalization (BTC, ETH, SOL, ADA).
This strategy requires carefully selecting the most promising cryptos on the market. Those projects have proven their solidity, given their resistance to volatility and constant growth.
Cryptocurrency experts in India point out that the main advantage of this strategy is its low operating cost and saving time and money on tax expenses. It is very suitable for investors just starting, as they do not need to carry out extensive analysis or use technical tools.
The disadvantage of long-term investment in cryptocurrencies is that the investor does not see immediate returns on their investment. It is money that is frozen there. It can also be risky if the investor has not thoroughly researched the cryptocurrency project.
Unlike investing in cryptos for the long term, this strategy provides more significant opportunities for immediate profits. Many of the best and most successful crypto traders generate regular income that allows them to live.
But, it requires a great daily dedication or at least several days a week. Investors need to mandatorily monitor the market at all times. Investors must constantly make decisions, analyze trends, identify signals, and interpret them correctly.
You have to study much more and be subjected to the stress generated by the market daily. Likewise, many emotions must be dealt with: hope/hopelessness, joy/frustration, anger/fear, etc.
Cryptocurrency day trading is undoubtedly riskier than long-term trading. Only a proper trading strategy with competent, technical and professional advice can minimize such risks and make trading more profitable.
According to cryptocurrency experts in India, primary research is paramount before starting to trade crypto assets by adopting the best cryptocurrency trading strategies from the best cryptocurrency traders in India.
The cryptocurrency market is flourishing day by day with the introduction of newer and more interesting products. What started with the introduction of Bitcoin merely and an overview of blockchain method has become a promising avenue for investments. To keep the investors’ money safe, modes of diversification are offered. It has led to the discussions on crypto mutual fund India and different other products.
What is Crypto Index Fund?
For the uninitiated, the Crypto Index Fund is a pool of different cryptocurrencies clubbed under a specific index. The constituents of the index fund are selected based on investment objectives. It is similar to the index of stocks where the investment in made in companies’ stocks. The crypto index fund India is in development stage and very few options have come into form. One such fund is a combination of Blue-chip crypto assets.
Process of investing in Crypto Index Fund
The process of investing in Crypto Index Fund India is simple. A lot of homework is done in advance by the crypto wealth managers. They research on the large group of crypto assets. By matching the crypto assets’ features with the investment objectives, the experts filter the options and provide an investment alternative. One such index is that of blue chip crypto assets.
Steps for investing in Crypto Index Fund include:
It is worth keeping in mind that the investment in Crypto Index Fund attracts an expense ratio. This ratio is percentage of the amount invested in underlying assets in the index fund.
Example of Crypto Index fund
For better understanding, the crypto index fund clubs the portions of cryptocurrency markets. One of the established examples of crypto index fund is Bitwise 10 Crypto Index Fund. Instead of investing in all cryptocurrencies individually, the ease of investing in a club of those make the process easier, faster and diversified. Hence, Crypto index fund allows investors to put money into crypto assets but indirectly. Bitwise 10 focuses on 10 best cryptocurrencies picked on the basis of market share size.
A few of the index funds are available as index tokens too. Examples are:
How crypto mutual fund and crypto index fund differ
The Crypto Index Fund is actually a type of Crypto Mutual Fund India. It pools all investor funds. The index fund invests in crypto indexes and earns the investors a lot of profit by cashing the volatility of the indexes. There is no fund manager available for index fund.
While the Crypto Mutual Fund India is a collection of cryptocurrencies, the crypto index fund pools in the crypto indexes or a part of cryptocurrency markets. Learn all about these before signing up for investments to understand the risks involved and to make suitable investment decisions.
The buzz is that Asia’s first Cryptocurrency ETF is about to launch in India. This event will be the outcome of MoU between Torus Kling Blockchain IFSC and India INX. Is this not the enough reason to be aware of the basics of cryptocurrency mutual fund India? The event clearly marks new beginning and hints at the changing ways of investment in coming times. So, to help you stay future-proof in your way of making investments, explained here are a few basics to know about the crypto mutual funds.
What exactly is a Crypto Mutual Fund?
A mutual fund investor might clearly know that this kind of fund accumulates money from investors and earns for them the returns received from investing in various assets. These assets are mostly stocks, bonds, underlying securities, debt instruments, etc.
A crypto mutual fund India gets its inspiration from this product and offers a basket of assets represented by a single product to investors. The distinguishing feature of crypto mutual fund is that the investments are made in different kinds of cryptocurrencies or various cryptocurrency markets’ assets. Hence, the feature of diversification becomes easier to achieve with crypto mutual funds.
Pros of crypto mutual funds
One can invest in crypto mutual fund more easily than in a cryptocurrency. The existing brokerage account can be used to invest in these funds. You need not make special arrangements to start investing in it.
These mutual funds can be saved in a retirement account. It is possible to treat these funds same as the funds with tax benefits.
The regulation of crypto mutual funds is top-notch. It safeguards the interest of investors quite significantly.
The investors can do the balancing of the portfolio rather easily because all mutual funds are held in a single account. Hence, crypto wealth manager can provide full view of the performing and non-performing funds and can help make decisions regarding switches rather easily.
As of now, the focus of Crypto mutual fund is Bitcoin. Since Bitcoin is quite a promising cryptocurrency and has helped create wealth, the crypto mutual funds prove to be a lucrative investment option.
Cons of crypto mutual funds
One cannot predict the performance of a crypto fund based on that of constituent cryptocurrencies. There can be conspicuous difference in their individual performances, especially in case of futures-based crypto mutual fund. Hence, the risk is not 100% eliminated.
The high trading cost can reduce the margins. It is estimated that the cost may go over 1%.
The liquidation window is limited as the trading is allowed only once in 24 hours; on the contrary, the cryptocurrencies are traded all hours of the day. It is one of the reasons behind the difference in the performances of crypto mutual funds and cryptocurrencies.
Research is the most trusted tool when one wants to diversify investments to newer avenues like crypto mutual funds. Hence, read a lot about them, follow their pricing patterns and the factors that influence their performance. You can also take help of crypto wealth manager to understand the costs, risks and possibilities of earning money available in these mutual funds.