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Invest Enough is Cryptocurrencies what you can afford to lose
Trends MilkywayBlogs 25-Jun-2021 Comments (10) 27

Invest Enough is Cryptocurrencies what you can afford to lose

Even if bitcoin and cryptocurrency are legal in India, then how much should people invest in them? Let’s discuss this in detail.

Are Bitcoin and Other Cryptocurrencies Legal in India?

To be honest, it is not easy to answer. The Indian government is not yet very sure about dealing with this new phenomenon. But here are a few facts to be noted. In 2018, the Reserve Bank of India came out strongly to ban it in India. After it, in 2020, the SC of India reversed this ban imposed by RBI. It was also followed by other Indian banks and curtailed the transactions regarding crypto exchanges. These banks are governed by the Reserve Bank of India and not by the Supreme Court directly. But recently, the Reserve Bank of India said that its 2018 ban was overruled by the decision of the Supreme Court.

About Cryptocurrency and Regulation of Official Digital Currency Bill, 2021

As things are standing, for now, even the cryptocurrencies including Bitcoin are not illegal in India but they are surely unregulated. And the ‘unregulated’ part of it is what is bothering the Indian government. But as the world of digital currency and crypto space is concerned about ‘no central authority regulating it’, the Indian government still is not sure about how to tame this. The government also does not want to miss out on this blockchain technology that is quite promising and rigid. Thus the government is planning to bring the “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,” which is expected by the government to clear the stance once and for all regarding cryptocurrencies.

What Will Happen If Crypto-Trading Ban in India?

After passing the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, the crypto-trading ban may be possible in India. If it happens, then what investors who hold cryptocurrencies will do to get their investment back? As per the report on ‘Cryptocurrencies: Fad or Forever’ declared by HDFC Bank, currently, Indian investors have deployed nearly $1.36 Billion in bitcoin or other cryptocurrencies. In case it is banned, I am sure that the government will not decline this investment during the day or overnight. It might be allowed for some time to be used by existing traders/investors to exit or take off their holdings.

If Allowed Or Become Legal. How Much Should You Invest in Cryptocurrencies?

Before making up your mind about this, firstly get deep research on related consequences and know all about what you are going to do.

You should know a well-known fact that cryptocurrencies have fallen more than 80 percent to low from the highs once every few years. And, 30 to 50 percent falls are usual and fairly regular.

If you believe that Bitcoin and other cryptos become legal and you are ready for the investment, then you should first invest some spare money to explore more from that investment. Initially, one can accelerate learning by putting money in cryptocurrencies. Without knowledge, the risk is high to lose money so invest enough what you can afford to lose. Beyond that, it’s up to the investor and its risk appetite.

But if you are having doubts regarding this, then don’t be in a hurry to venture out adventurously, it’s time to be a cowboy! Keep investing with the majority (95 to 99 percent) of the portfolio in profit-proven assets such as gold and real estate, equity, debt, etc. It’s better to have an advisor that will help you in discussing your need regarding increasing the exposure accordingly.

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