How to Buy Cryptocurrency in India – A Step-By-Step Guide
20 June 2022
The popularity of cryptocurrency has been soaring in recent years, thanks to growing interest in digital assets. Now more investors want to know how to buy cryptocurrencyto invest in the newest form of currency: crypto coins.If you are planning to include the infamous Bitcoin, Ethereum or Dogecoin in your investment portfolio, here are the steps tobuy cryptocurrency. Read on!
What is Cryptocurrency?
A cryptocurrency is a digital or virtual form of money that exists on a decentralised network. The decentralised network is built by using Blockchain technology.
As the name suggests, Blockchain is a chain of connected blocks in an online database. Each block contains information that is verified by each member of the network. This means that the entire network of people must verify each transaction on the network. This is why cryptocurrency can circulate without the need of a central authority such as a government or bank.
Cryptocurrencies have gained significant popularity over the years because they are safe digital assets that don’t rely on financial institutions. If you are planning on buying cryptocurrency in India, here is a breakdown of the things you must know before investing.
What is the Difference between Cryptocurrency Exchange and Cryptocurrency Broker?
There are twomajor ways tobuy cryptocurrencyin India. You can use the services of a cryptocurrency broker who offers financial services to people who buy and sell cryptocurrencies. You may also choose a cryptocurrency exchange to directly trade crypto coins with other investors.
The primary differences between a crypto broker and a crypto exchange are discussed below.
It is an online platform for investors to trade cryptocurrencies for other digital/paper currencies directly with other investors as per the market prices.
It is a firm or an individual who serves as an intermediary between the person buying and the person selling the cryptocurrency. Investors can place their order on the exchange through the broker.
Cryptocurrency exchanges charge minimum fees because you can trade directly on the platform.
Crypto brokers levy commissions and trading charges for their services.
The investor will have to create an exchange account to sell/buy cryptocurrency.
Investors will need to deposit their funds and crypto coins to the broker’s account.
Most crypto exchanges offer basic trading functions, which might be enough for seasoned investors.
A broker provides specific trading tools to its users for technical analysis and risk management.
Ideal for advanced users of cryptocurrencies who do not want intermediaries.
Ideal for beginners who want to trade small amounts of cryptocurrencies.
How to Buy Cryptocurrencies in India
Now that you know the basic differences between a crypto exchange and a crypto broker, follow these steps to learn how to buy cryptocurrency in India.
Step 1: Choose a broker or a crypto exchange
To start your crypto journey, you must decide on your investment approach. Decide whether you want to use the services of a cryptocurrency broker or trade directly on a cryptocurrency exchange. Some of the well-known cryptocurrency exchanges in India are Unocoin, CoinDCX, WazirX, etc. Try to choose a crypto broker or an exchange based on ease of use, charges levied and security.
Step 2: Create and verify your account
After choosing your mode of investment, you need to create an account for selling and buying crypto coins. The registration process is quite similar for brokers and exchanges.
If you opt for a cryptocurrency broker, you need to sign up to their website with a valid e-mail id and password. For cryptocurrency exchanges, you need to visit the online platform and create a trading account.
In both cases, you will be asked to submit documents to successfully complete the KYC process. The details will then be verified, which can take somewhere between a few hours to a few days.
Step 3: Deposit cash
After successful verification, you can deposit your investable cash in the broker/trading account. Crypto exchanges require you to deposit money into your crypto wallet. You can deposit your fiat money via your bank account. You can also deposit crypto money by providing the address of your existing crypto wallet.
On the other hand, you can deposit money to your broker’s account by using other forms of payment such as debit cards, credit cards, e-wallets, etc.
Step 4: Place your cryptocurrency order
Crypto exchanges will let you place a direct cryptocurrency order. You can browse through the different cryptocurrencies available on the exchange and select the desired token (cryptocurrency) that you wish to buy.
After placing a buy order, the exchange will find a seller to match your trade. The exchange of crypto coins will successfully complete the transaction between the two traders. You can also avail the services of a crypto broker if you are not sure about how to buy cryptocurrency. You can contact them to find a suitable seller of your desired crypto coins. The broker will find a seller and then verify the transaction between the accounts of the buyer and the seller.
Step 5: Select Storage
Now that you have bought your crypto coins, you need to select crypto storage to keep your coins safe. You can either choose a ‘custodial wallet’ that is the default storage offered by a crypto exchange.
You can also choose to store your crypto coins in offline and online personal wallets. – Cold wallets and paper wallets let you store your crypto coins in an offline mode. A cold wallet is a hardware device that you connect to your computer while sending or receiving cryptocurrencies. A paper wallet is a printout of unique scannable codes that are the keys to your crypto wallets. – Hot wallets are online cryptocurrency storages that are typically available as desktop or mobile apps.
To store your newly-bought crypto coins in a personal wallet, you would need to provide the unique address of your offline/online wallet to the exchange platform or the broker.
If you are an investor who wants to diversify/her portfolio, investing in digital assets like cryptocurrencies might be a good option for you. Now that you know how to buy cryptocurrency, you may choose to invest through a cryptocurrency exchange or broker. But, make sure to store your crypto coins (and the key) safely.
If you are looking for investment options other than Crypto, visit Navi Mutual Fund and get started today! *Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
FAQs on How to Buy Cryptocurrency
Q1. Are cryptocurrency exchanges allowed to operate in India?
Ans: Currently, there is no ban on the exchange or use of cryptocurrencies in the country. It was briefly banned by the Reserve Bank of India (RBI) in 2018. However, the Supreme Court of India lifted the blanket ban that was imposed by the RBI. The Union Government is planning to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill to regulate crypto transactions in our country.
Q2. Which is the best cryptocurrency to buy in India?
Ans: Some of the best cryptocurrencies to buy in India are: Bitcoin (BTC) Tether (USDT) Ethereum (ETH) Binance Coin (BNB)
Q3. How safe is cryptocurrency?
Ans: Investing in cryptocurrency can be extremely profitable, but it is susceptible to high volatility and frequent market crashes. Storing the crypto coins in online and offline crypto storages can also be a major safety concern. Although crypto exchanges are based on Blockchain technology, there are chances of hackers gaining access to third-party crypto storage platforms. It is advisable to research the various crypto exchanges, crypto storage, etc., to make an informed decision.
Q4. Can cryptocurrency be converted to cash?
Ans: It is possible to convert cryptocurrency into cash in two ways, either through an exchange or a broker. You can cash out your crypto coins on a cryptocurrency exchange platform at a given ‘exchange rate’. The exchange rate of a crypto coin is determined by its demand. The rate will often determine how much cash you will get in exchange for your cryptocurrency. You can also choose a third-party broker for encashment. Once you deposit the crypto coins in your broker’s amount, he/she will transfer the converted value to your bank account. This may take a day or two. However, such transactions will require an exchange fee as well as taxation liabilities.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
Before you go…
Want to put your savings into action and kick-start your investment journey ? But don’t have time to do research. Invest now with Navi Nifty 50 Index Fund, sit back, and earn from the top 50 companies.
*Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
We are a diverse group of writers, editors and Subject Matter Experts striving to bring the most accurate, authentic and trustworthy finance and finance-related information to our readers. Our mission is to simplify jargon and industry lingo. We believe sharing knowledge through relatable content is a powerful medium to empower, guide and shape the mindset of a billion people of this country.
What is Cosmos (ATOM) Crypto and How to Invest in It?
Cosmos is an ever-expanding ecosystem of many collective independent blockchains. Known as the “i...Read More »
Crypto Wallet – Its Types, Importance and How To Choose One?
A crypto wallet is a software or an offline physical device that secures the private keys for your ...Read More »
What is Crypto Trading Bot – Its Types and How to Create your Own?
A crypto trading bot is a computer program that automatically buys and sells assets to take advanta...Read More »
Top 10 Cryptocurrencies In India To Invest In 2023
Cryptocurrencies have gained wider outreach in recent times, owing to their heightened security, ea...Read More »
Kadena Blockchain Explained: Price Prediction and How to Buy KDA Coin
Kadena or KDA is a public blockchain network that is based on a braided, parallelised proof-of-work...Read More »
Liquidity Trap: Meaning, Causes and Indicators
The building block of Keynesian economics lies in its belief that spending components like consumpt...Read More »
Initial Coin Offering (ICO): Meaning, Types and How it Works
Initial coin offering (ICO) is the process of raising capital for a new crypto project. This event ...Read More »
Fantom (FTM) Network Crypto: How to Buy and Sell, Price and Advantages
Fantom is a smart contract blockchain network that is highly popular among developers of Decentrali...Read More »
Internet Computer Protocol (ICP): Price, Investment Benefits and Drawbacks
The Internet Computer Protocol (ICP) is a revolutionary innovation that was developed by the Dfinit...Read More »
What is GALA Crypto and How to Buy GALA Coins?
GALA is an Ethereum-based cryptocurrency that powers Gala Games, a play-to-earn gaming platform. Th...Read More »
What is Dent Crypto and How to Buy Dent Token
Mobile or broadband data has become a global necessity with the rising importance of the internet i...Read More »
Getting to Know Tron: How It Works, Benefits, Price and How to Buy
Tron is transforming the way content reaches the audience. This decentralised platform facilitates ...Read More »
Diwali 2022: Diwali Holidays – The Festival of Lights
The ‘Festival of Lights’ is one of the biggest and most anticipated festivals in India. This is...Read More »
Best Index Funds – Top 20 Index Funds in India
Index funds replicate the performance of a stock market index, such as the Sensex or Nifty 50 to ge...Read More »