Investment in cryptocurrencies has increased among the youth due to good profits and easy remittance. But older people are skeptical of investing in them because they are unregulated.
Harsh Vasist, a 24-year-old student, shared: “I started investing in cryptocurrencies last year. It was a new concept to me. Initially, I was uncertain about it, but with time, I have become acquainted with the tips and tricks of investing.” He invests in cryptocurrencies because they are end-to-end encrypted and “hence safe”.
According to the 2021 Global Crypto Adoption Index by Chainalysis, a blockchain data platform, India had the second position among 154 nations in the 2021 Global Cryptocurrency Adoption Index. India also had a high ranking in P2P (peer-to-peer) exchange trade volume.
Keyur Shinde, 21, has been investing in cryptocurrencies for the past one year. “Initially, I incurred some loss, but with time, I have learned how it works. I monitored cryptocurrencies for a week, sometimes for a month, to understand the trend. The more you monitor, the more are your chances of making a profit.”
“I use trading platforms like WazirX and CoinDCX, and have invested in Dogecoin, Shibainu, Tron coin and Wink. I make sure the cryptocurrencies I invest in are listed on trading platforms with 45-50 million subscribers, Shinde added.”
Apart from investing in cryptocurrencies and earning profits, people also use them as means of transferring money to their families.
Vats Meha, a 22-year-old MSc student, believes that transferring money overseas through cryptocurrencies is easier than the traditional methods. “My elder brother is doing a job in the United States. Recently, he started to transfer money using bitcoin which helped him save the extra money that is charged by banks and other money transfer services.” Meha has started investing on the advice of her brother.
Sidharth Sogani, CEO of CREBACO Global Inc which stands for Credit Rating for Exchanges Blockchains and Coin Offerings comprises experts who have experience of working with blockchain and cryptocurrencies said the new generation believes in digital value. Cryptocurrencies are a new asset class. His advice is to ”have the new emerging asset class in the portfolio…. However, do not allocate a large part to it as it’s volatile.” Asked why people are investing in cryptocurrencies in large numbers, he said though unregulated, they are not illegal. “The regulators are working on it. I believe a Bill will come very soon. Another reason is aggressive advertising….”
Amisha Bedi, a cryptocurrency consultant, informed The Observer that cryptocurrencies is a good investment option. “It gives you so many benefits like more profit in shorter duration, easy transfer, safety against hacking, etc. However, before investing, you should pay attention to how a cryptocurrency is doing and make small investments initially.”
Older people are, however, not keen on investing in cryptocurrencies.
Sujeeth Kumar, 51, and employee of the Indian Overseas Bank, shared: “I have been investing in mutual funds since 2003. It’s not that there are no risks in mutual funds, but they are safe. Rules and regulations are such that your money will be safe even if the company plunges.”
For him, investing in mutual funds is secure as you can always look at their performance. “Right now, I have invested in Mirae Asset, Axis Longterm Equity Fund and DSP Blackrock, among others. Even if these funds face a loss, I know that my money is safe as it is regulated by SEBI, but I cannot say the same thing about cryptocurrencies,” Kumar added.
School teacher Rakesh Makkar, 48, also thinks it is safer to invest money in mutual funds than in bitcoins. “My son asks me to trade in cryptocurrencies, but I don’t feel comfortable. I am satisfied with my investments in small-cap and mid-cap mutual funds which give me more (than) average annual returns.”
Asked if they plan to invest in cryptocurrencies in the coming years, both Kumar and Makkar replied in the negative.
On November 16, 2021, RBI governor Shaktikanta Das cautioned investors of potential pitfalls of digital currency, called it a serious concern for the macro-economy and financial stability. His warning came after the Centre, at a meeting chaired by Prime Minister Narendra Modi, government proposed regulatory control on cryptocurrencies to check money laundering and terrorism instead of banning them.
anwesha.s@iijnm.org
