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How to Buy Bitcoin in India – How to Invest in Bitcoin?

Buy Bitcoin in India

Have you heard of cryptocurrency or Bitcoin to be specific? It gained mainstream attention and adoption in the past couple of days which raised the price to achieve its highs above INR 53 lakhs in late 2021. Many institutions jumped in to invest in Bitcoin and also reportedly made some profits. No doubt the current market trends are pretty diverse since then, but the current conditions may also be looked like a good time to buy Bitcoin.

So where & how to buy Bitcoin? What is needed to buy Bitcoin & what is the minimum investment required? Let’s Check it out!

What is Bitcoin?

Before diving into the topic, let’s have a glance at the basics!

Launched by mysterious Satoshi Nakamoto in 2009, Bitcoin is a decentralized, digital currency that uses peer-to-peer technology to carry out transactions without the interference of a central authority like banks. 

The virtual currency was been built after the great collapse of the economy post the 2008 financial crisis. Unlike the bank’s ledger, Bitcoin’s ledger is outspread to every node (or computer) connected to the network. Therefore, making the network completely decentralized and irreversible. 

Why Invest in Bitcoin in India?

It is a known fact that investments are done to incur profits. Cryptocurrencies, specifically Bitcoin in recent times have emerged to be one of the finest investment options. The constant price variations have become a haven for the traders who take risks and invest, expecting to get high returns. 

Why invest in Bitcoin here, in India?

Bitcoin, ever since the pandemic crash, a couple of years before has become the most desired trading and investment tool in India. India witnessed a huge surge of more than 700%, estimating 15 to 20 million crypto investors in India. Currently, India registers the highest crypto owners and stands second in terms of adoption rate. Additionally, more than 200 start-ups in this industry are currently working having good potential and opportunities. 

So why invest now? Traders usually look out for great opportunities to get in, and the current market conditions are pointing out towards a good buying opportunity may be approaching fast. The current market crash may be an advantage for investors who can buy Bitcoin at a discounted price.

Why Should You Buy Bitcoin? 

It is a known fact that cryptos, specifically Bitcoin are very volatile as the price variations are at the extreme sometimes, irrespective of the direction. These price actions have attracted many before as an investment option. However, it may be pretty risker for the newbies having less knowledge of the working of the industry. 

Therefore, only the people who wish to take risks and also be ready to lose their investment buy Bitcoins hoping to incur good profit. As said before, one needs to research before buying Bitcoin, but experienced hands do play well, gaining significant profits. Therefore, buying BTC may be pretty easy but maintaining the investment rate could be the crucial phase. 

Download India’s most valuable bitcoin investment app now!

Points to Remember Before Buying Bitcoin in India

Crypto markets are pretty much volatile as the prices keep varying now and then much similar to stock markets. Hence it is very important to DYOR (Do Your Research) before entering into a new trade. The user has to follow the price movements closely before making a buy decision. Moreover, the trader also has to keep himself acquainted with the external factors that may impact the price of the asset. 

Key Points to Consider Before Investing in Bitcoin

There are 3 main key pointers to be considered before buying Bitcoin:

  • Payment Options:- The payment options include bank transfers, credit cards, and payment Apps like Paypal, Apple Pay, Google Pay, etc.
  • Platform Used to Buy Bitcoin:- Bitcoin is usually bought on centralized exchanges, OTC desks, peer-to-peer marketplaces, and in some payment apps like PayPal. 
  • Storing Bitcoin:- After you buy Bitcoin, you need to store BTC in a custodial or a non-custodial Bitcoin wallet 

How to Buy Bitcoin – A Step-by-Step Guide!

Before buying Bitcoin, it is important to know about Private and Public keys, which are the tools used to ensure the security of the crypto economy. Public keys are used to transfer Bitcoin into a wallet while Private keys are used to confirm the transactions. Private keys are meant for individuals and hence are should not be shared. 

  • Step 1: Choose a Platform to Buy Bitcoin

The first step is to choose a secured platform like a trading platform like exchanges, payment services, etc. Crypto exchanges are one of the preferred platforms where the sellers and the buyers meet up to carry out a deal. Registering with a crypto exchange will enable you to buy, sell or hold cryptocurrency and also enable you to withdraw crypto.

There are mainly 2 types of exchanges, Centralized and Decentralized. Decentralized exchanges are not controlled by any central authority and allow the individuals to maintain their anonymity. On the other hand, Centralized exchanges like CoinDCX, follow some laws like KYC, submitting documentation, etc

  • Step 2: Connect Your Exchange Wallet to a Payment Option

After choosing a platform, the next step is to set up a payment option through which you can fund your wallet to buy Bitcoin. All you need to do is verify your identity as per the requirements of the crypto exchange. Once the exchange verifies your identity, you can connect your bank account or your preferred credit/debit card or use UPI.

Crypto exchanges charge certain fees to carry out bank transfers which differ depending on the platform. For instance, we at CoinDCX do not charge any fees for UPI and bank transfers, however, we charge a 0.5% fee on Net Banking and a 1% fee for deposits above INR 2000 via MobiKwik wallet.

  • Step 3: Storing Your Bitcoin 

The next step is pretty important which is to safeguard your purchased Bitcoin. You need to choose a safe and secure wallet that may storge the Bitcoin public address safely. Every crypto exchange does provide an integrated Bitcoin wallet after registration where-in the assets are stored immediately after every transaction 

Crypto exchanges store major of their assets in a cold wallet that is not connected to the internet. Further, if you want to store your assets in another wallet like hot or cold, desktop or mobile wallet, you can transfer them at your convenience. 

Why Do I Need to Verify My Identity to Purchase Bitcoin?

Verifying your identity is the process carried out by the Centralized crypto exchange platform. These platforms are required to comply with Know Your Customer (KYC) & Anti-Money Laundering (AML) regulations while transferring the money. These are done to safeguard the user’s funds. 

What is the Minimum Investment required to buy Bitcoin?

There is no minimum limit required to invest in Bitcoin in India, similar to that of stocks. You can invest in small amounts in Bitcoin if you do not wish to buy the entire crypto. A registered trader after funding his/her wallet can choose any amount to buy assets. Here, on CoinDCX, you can buy Bitcoin with a minimum capital of as low as INR 100. 

Where to Store Bitcoin?

Buying Bitcoin is pretty simple but storing is very important on a secured platform. Bitcoin or any other assets are safely held in wallets. A wallet is a software program that stores your cryptocurrency keys and gives you access to Bitcoin. The wallet contains pairs of public and private keys, cryptographically secured. These keys are used to send, receive or spend Bitcoin. 

There are 5 types of wallets:

Hot Wallets

Hot wallets are online wallets that require internet-connected devices to operate. These wallets are not considered completely secured as they generate keys once connected to the internet. No doubt, hot wallets are pretty easy to trade as they have quick accessibility to your assets, but they are prone to online hacks too. 

However, hot wallets which are mainly the wallets provided by the exchanges have been made secured using strong passwords, 2FA(2-Factor Authentication), Email & Mobile verifications, etc. These wallets are best suitable for small amounts of assets that you can actively trade on the exchanges. 

Cold Wallets

In contrast, Cold Wallets are not connected to the internet and hence possess less risk of getting compromised. These wallets also called offline or hardware wallet uses software that displays the user’s portfolio without putting their private key at risk. A hardware wallet is usually a USB device that stores private keys. 

These wallets are considered safer than that hot wallets as they remain aloof from any virus attack or security breach. Additionally, these wallets are open source and community audits are performed through codes. The best way is to hold a hot wallet for small amounts of cryptos and a cold wallet for larger amounts, and exchange to carry out the trade. 

Desktop Wallets

Just like any other App on your desktop, these wallets also are computer programs that run on your PC or Laptop. They can store & manage your keys offering some more additional features. The desktop wallet is more powerful than the cold or hardware wallet as they are the core wallet that allows you to run a full node to validate the transactions within your wallet. 

However, you need not become a validator, syncing the entire blockchain to use a desktop wallet. One can just send or receive cryptos like any other wallet as it only controls the keys that are used to move the crypto rather than your private keys. 

Mobile Wallets

Mobile wallets are the crypto wallet App that enables you to store and control cryptos you hold on your smartphone. The wallets are available on Android & IOS which are convenient to carry on payments. These wallets scan QR codes and load the payment details and much similar to other payment gateways, Bitcoin is used to do the payments. 

Web Wallets

These are online-based crypto-based wallets that can be accessed using desktop or mobile. The passwords are stored in servers that require the internet to access and hence carry the risk of theft. 

What are the Alternative Ways to Buy Bitcoin?

Bitcoin or any other cryptocurrencies can be bought from a crypto exchange. But there are some alternative ways too.

Bitcoin ATM’s

Bitcoin ATMs have become popular of-let as they are the most convenient ways to buy Bitcoin. The ATM enables users to enter cash into the machine, buy the desired amount of BTC and later transfer it into a hot wallet. However, Bitcoin bought from ATMs does carry a purchase fee and conversion fee that make the deal a little costlier. 

P2P Exchanges

P2P or Peer-to-Peer exchanges are the platforms where-in the buyers and sellers meet directly without the interference of any third entity. You need to register first on a P2P exchange and post a request to buy Bitcoin along with the payment details. The users on the other end go through the listings and offer and directly get connected to close the deal. 

Brokerage Platforms

Much similar to the stock brokerage firms, the crypto brokerage platform also enables the user to buy Bitcoin. These platforms usually do not charge any trading fee as they receive a commission from payment order flow & passing its volume to another platform.

Bitcoin.com & Bitcoin Wallet

One can easily buy BTC from the Bitcoin.com website and Wallet which is completely non-custodial. 

How to Sell Bitcoin?

Selling Bitcoin can be carried out on the same platforms where you have purchased from. You can place a ‘Sell’ order and select the amount of Bitcoin you wish to sell. Similar to a buy order, you can select from Limit, Market or Stop-Limit Sell orders. However, after the sale is completed, you can easily transfer back to your bank account which usually takes very little time. 

How to Buy Other Crypto Assets?

Other crypto assets like Ethereum, XRP, Cardano, etc can be bought similarly as you buy Bitcoin. Considering buying from exchanges, after registration, verification & funding of the wallet, you can search for the trading pair you wish to buy. Further, after entering the amount, you can buy any assets which are available on that particular platform.

On the other hand, payment gateways have limited availability of altcoins and hence buying Bitcoin is preferably bought here. 

What is Bitcoin Mining & How to do it?

Bitcoin mining is a process to generate new Bitcoin. It is a known fact that when blockchain technology came into existence, one had to check whether the blockchain was working fine or not. Therefore, Bitcoin was rewarded for every successful transaction which was validated by solving complex mathematical problems. 

This process is carried out using a high-power computer and the node or computer that solves the problem first is rewarded with a new Bitcoin. Hence calling the entire process Bitcoin mining. As mentioned, Bitcoin mining is very complicated and may require huge hardware requirements. In some cases, multiple computers get connected to perform mining popularly called Mining Rigs. 

Wrapping it Up!

Bitcoin is a new investment instrument in the market which carries a decent ROI if held for a longer-term. However, market conditions are pretty uncertain and hence buying and selling Bitcoin at the right time may attract notable gains. 

Yet, plenty of options are available within the space to buy, sell, invest or hold Bitcoin. Therefore, one can make notable gains by choosing the correct option at the right time. 

FAQs

What Are the Most Popular Venues for Buying Bitcoin?

Bitcoin can be purchased on centralized exchanges like CoinDCX by placing a buy order.

Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?

Apart from exchanges, you can grab them from other sources like P2P exchanges, brokerages, etc

Does Bitcoin Make Sense for You to Invest In?

Bitcoin is considered one of the better investment options for the long term as well as the short term. If traders are willing to mitigate risk on their investment, Bitcoin may give you better profits.

What is the minimum amount needed to buy Bitcoins in India?

There is no such minimum amount to buy Bitcoin in India. On CoinDCX, you can buy Bitcoin with a capital as low as INR 100.

Is it legal to buy Bitcoins in India?

Bitcoin is not considered a legal tender in India, nor banned too. Therefore, Buying, selling or trading can’t be said as legal but either illegal.

How do I ensure that my Bitcoin is stored safely?

You have multiple wallets which possess their features. Of all hardware wallets or the USB, wallets are considered the safest as they refrain from being connected to the internet.

How to set up a Bitcoin Wallet?

To set Up a CoinDCX Bitcoin Wallet, download CoinDCX App on your smartphone and follow the instructions ahead. Once your data is verified, fund your wallet to buy Bitcoin.

What Are The Chances Of Bitcoin Crashing?

Bitcoin prices highly depend on demand and supply. If the buying pressure mounts, the BTC price rises and with increased selling pressure, the price tends to fall. Therefore, the possibilities of Bitcoin crashing are fewer but the price may keep on varying depending on the volume.

Is Bitcoin A Good Investment For The Future?

Bitcoin has been proven to get huge returns compared to the other traditional investment tools like gold, bonds, etc. One can invest in Bitcoin and expect good returns in the long term without being impacted by short-term market trends.

How Much Is 1 Bitcoin Worth Today?

At the press time, 1 Bitcoin is worth INR 15,11,958.

Can Bitcoin Be Converted To Cash in India?

To buy Bitcoin, one has to transfer funds to their exchange wallet, and further at closing a deal, one can transfer back the funds to their bank account with ease. In this way, bitcoin can be converted to cash in India.

Is Bitcoin Mining Free?

Bitcoin is an open-source code and hence the mining software is also free and can be downloaded on their system for free. However, it involves huge investment and maintenance costs.

Are Bitcoin And Cryptocurrency The Same Thing?

A cryptocurrency is a virtual form of currency where the transaction is verified and validated within a decentralized system using cryptographic codes. And Bitcoin is one among them.

How Does Bitcoin Technology Work?

Bitcoin is a computer-coded file that is stored in a wallet. One can easily send or receive Bitcoin, where-in all the details of the transactions are stored on the blockchain.

How Can I Convert Bitcoins To Cash?

After selling your Bitcoin by executing the sell order, your Bitcoin would be converted to fiat and stored in your wallet. By transferring the funds back to your bank account, you can convert Bitcoin back to cash.

How Many Bitcoins Are There?

Bitcoin value depends on demand & supply and is heavily dependent on its feature being scarce. There are only 21 million BTC that can ever be created, out of which 18.5 million are already in circulation.

What Type Of Currency Is Bitcoin?

Bitcoin is a digital or virtual currency that cannot be touched or held physically. It is a computer program that is stored on a blockchain that is secured using cryptography.

Who Created Bitcoin?

Bitcoin was created by an anonymous founder who called himself ‘Satoshi Nakamoto’ back in 2009. No one knows whether Satoshi is an individual or a group of people or the name of a company.

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