The Indian cryptocurrency market has seen a significant number of enthusiasts. A recent survey conducted by Consensus and YouGov revealed that 32% of Indians have purchased cryptocurrencies at some point, with 21% still holding digital assets. Bitcoin (BTC) emerged as the dominant cryptocurrency among the purchases.
Despite the Indian government’s implementation of a 30% tax on income from digital assets, the sentiment towards cryptocurrencies in the country remains strong. According to a report by the KuCoin cryptocurrency exchange, the Indian digital assets market is projected to reach $241 million by 2030.
With a population of 1.4 billion people, India has a large number of potential cryptocurrency investors. Data from the United Nations Economic and Social Commission for Asia and the Pacific shows that 68% of this demographic falls within the 15-64 age range, indicating a higher likelihood of interest in cryptocurrencies like BTC.
This article provides a guide on how to buy Bitcoin in India through centralized and decentralized exchanges, systematic investment plans (SIPs), over-the-counter (OTC) deals, or direct peer-to-peer (P2P) exchanges.
Buying BTC on a centralized crypto exchange in India involves considering factors such as ease of use, security, and low fees. The process includes completing the exchange registration, verifying phone number and email, and undergoing the Know Your Customer (KYC) procedure to prevent financial crimes. One can purchase Bitcoin through OTC or P2P trading on a centralized exchange, with different minimum order sizes depending on the platform.
On the other hand, decentralized exchanges (DEXs) facilitate peer-to-peer transactions without the involvement of a single person or group of executives. Transactions are executed through smart contracts, eliminating the need for intermediaries. While DEXs do not allow buying Bitcoin with fiat currency, they offer lower fees compared to centralized exchanges and allow users to have full control over their digital assets.
Systematic investment plans (SIPs) provide a disciplined approach to regularly investing a fixed amount in assets, including Bitcoin. Investors can capitalize on market fluctuations while retaining their portfolios for a long time. To invest in SIPs, one needs to download the app of a service provider offering SIPs, complete the registration and KYC procedures, and select the relevant options.
For direct peer-to-peer crypto transactions, one can choose on-exchange or off-exchange methods. On-exchange transactions involve using a P2P service on a crypto exchange platform, while off-exchange or OTC transactions require finding trusted buyers or sellers and directly agreeing on transaction terms. Security and adherence to local regulations are crucial in both methods.
Various modes of payment are available for cryptocurrency transactions in India, including bank transfers via Immediate Payment Service (IMPS) and Unified Payments Interface (UPI). Sellers may also accept payments through digital payment services like Paytm and Lightning UPI. Additionally, buyers can use other cryptocurrencies or stablecoins to pay for BTC.
After purchasing Bitcoin, it is essential to store it securely. Different types of Bitcoin wallets are available, including desktop wallets, mobile wallets, online wallets, hardware wallets, and paper wallets. Hardware wallets and paper wallets provide offline storage, while mobile wallets offer convenience. Desktop and online wallets offer security comparable to exchanges. Wallets can be custodial or noncustodial, with noncustodial wallets providing users with complete control over their private keys and funds.
Indian law requires individuals to pay a 30% tax on gains from trading virtual digital assets, including Bitcoin. Compliance responsibility lies with the exchange when buying BTC on an Indian exchange, while buyers and sellers must ensure compliance requirements are met when conducting international exchanges or P2P transactions.
Before buying Bitcoin in India, it is crucial to carefully consider regulatory uncertainties, market volatility, and stay updated on policy changes. While the accessibility of rupee transfers through exchanges is a benefit, there are still restrictions on certain payment options. Individuals should assess their risk tolerance, understand market dynamics, and stay informed before making any investment decisions.
Note: This article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making investment decisions, as every investment and trading move involves risk.