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Investing in cryptocurrency: Indian investors are in it for the long haul
- Indian investors are shifting towards placing long-term bets on cryptocurrency to diversify their investment portfolio, with 65% of Mudrex users considering cryptocurrency holdings as a long-term investment.
- Youthful investors (29-year average age) account for a large part of this shift in India, which is leading the way in the global adoption of cryptocurrencies,
- New rules under the Financial Intelligence Unit have mandated digital asset service providers and cryptocurrency exchanges to follow KYC procedures and monitor any suspicious transactions,
- Some cryptocurrency exchanges are organising seminars and writing blog posts to educate users about the asset class and how to make informed investment decisions,
- Investors are adopting strategies such as systematic Investment plans (SIP), value investing, buy-and-hold strategies, and portfolio diversification to minimise their exposure to market volatility,
- While regulatory uncertainty is held to have kept some startups out of India, on the other hand, the country is emerging as one of the global testing grounds for cryptocurrencies,
- In addition to market risks and volatility, investors have to consider the tax implications of trading, selling and spending cryptocurrency. In India, users are expected to pay up to 30% of profits obtained from cryptocurrency transactions in tax, and 1% in TDS,
- Tech-savvy investors in the country are also learning the complex technical aspects of cryptocurrency and diversifying their portfolios across various long-term opportunities,
- Proposed legislation, such as the Cryptocurrency and Regulation of Official Digital Currency Bill, has failed to pass through parliament, leaving investors uncertain about the future of the asset class,
- Cryptocurrency exchanges are calling for regulations to promote more organised activity, which could encourage mainstream investors to participate in investing in the asset class.
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