Caution is the buzzword for crypto investors

Vijay C Roy

Chandigarh, November 25

Lured by high returns, Chandigarh-based Naveen Guglani (name changed), an IT professional, invested all his savings in digital assets, including bitcoin, ethereum and binance. Bitcoin was trading at a high of $69,000 in November 2021, but now it is worth only $16,520.

Over 115 Million investors in India

• Over 115 million investors in India either hold cryptocurrency or have traded in it in the past six months, representing 15% of the Indian population between the age of 18 and 60
• According to insiders, a majority of the crypto investors are based in the South, followed by the West and the North

Like Naveen, there are many crypto investors in the region who have lost their savings to volatility. Globally, around 73% of retail bitcoin investors have lost money, according to a recent report by The Bank for International Settlements based on the chronology of downloads of cryptocurrency exchange apps.

“While profit or loss is the reality of any financial market, it needs to be seen from the lens of an entry and exit point by different individuals. The crypto market is still young and, therefore, carries more volatility than equity market. Investors who have put in money in the past six months have lost money, but those who invested two years ago have made significant profits,” said Prashant Kumar, CEO and founder, weTrade.

He said the recent developments at FTX will act as a cleansing agent for the crypto industry. Retail investors should be wary of exchanges, which also act as custodians.

On the future of cryptocurrency in India, Sathvik Vishwanath, co-founder & CEO, Unocoin, said, “The Finance Minister has announced the introduction of Central Bank Digital Currency (CBDC) in the form of a digital rupee. This will provide a boost to India’s digital economy. Digital currency will also lead to a more efficient and cheaper currency management system.”

Analysts feel there is a significant volatility in the crypto markets that cannot be ignored. “By mentally preparing for these adverse and occasionally terrifying investment performances, the smart crypto investor will be able to act rationally during unexpected price declines,” said Sathvik.