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The cryptocurrency fever has gripped Indians as more and more investors are exploring the new investment idea. As per reports, around 20 million Indians started their crypto journey in the year 2021 *. Increased publicity, newer apps for crypto trading and the expectation of attractive returns has investors adding crypto to their portfolios. 

If you are also thinking of starting your crypto journey, here are a few points that you should consider –

Assess the quantum of investment

Find out how much you can invest in crypto. When you are starting, do not direct all your savings to cryptocurrency. Instead, invest 10% to 25% of your savings to test the waters.

Ensure you have the risk appetite

Crypto trading and investment are prone to considerable volatility risks. The crypto market is not controlled by the Government or any other regulator. While you might make windfall gains, there is a possibility of losses too. So, invest in crypto only if you have an aggressive risk appetite.

Choose the crypto platform and the currency to invest in

Thanks to the evolving crypto ecosystem, multiple new apps and platforms have been launched to allow investors to invest in crypto. Investment can be done through digital exchange platforms and even digital wallets. So, search for the available platforms and choose one which suits your needs.

Secondly, choose the cryptocurrency that you want to invest in. Bitcoin and Ethereum are the most popular crypto options. However, there are other options too. Know the available options and then pick the right currency.

Check the past returns

While past returns are no indicator of future performance, they can give you a context of the returns that you can expect. Check how crypto has performed in the past, both the highs and the lows.

Understand the taxation rules

In the latest Union Budget of 2022, the Finance Minister, Mrs Nirmala Sitharaman, introduced taxation on cryptocurrency. Profits earned from crypto trading or investment would attract a tax of 30%. Moreover, a TDS of 1% would also be levied on such profits. Know this taxation rule since it would considerably impact your post-tax returns from crypto investments.

While you might be excited about starting your crypto journey, knowledge of these points would help you understand your investments and know what to expect.

It is still not under the purview of stringent regulations and hence should be carefully evaluated before investing.