Crack the crypto investing code: The systematic way to invest in crypto assets

moneycontrol.com:

The lockdown in March 2020 paradoxically opened up the cryptocurrency market to a huge number of Indians.

Around two crore Indians invested in cryptos in 2021 even as prices touched all-time highs. Many youngsters and millennials jumped into the market in the hope of earning higher returns quickly. It is estimated that Indians hold around $5.3 billion in crypto assets, which is one of the highest in the world. Let's understand how Indians invest in cryptocurrencies.

Investment pattern of Indians in cryptos

The government imposing a levy on crypto gains was a blessing of sorts for investors who were glad to have at least some certainty around taxes and they can now understand the tax implications of crypto transactions and can conveniently file taxes on their crypto gains.

Cryptocurrency exchanges allow investing in cryptos through systematic investment plans or SIPs. You can invest small amounts of money daily, weekly or monthly in cryptos, similar to how one does in mutual funds. For instance, crypto exchanges allow you to invest a minimum of Rs 100 per SIP instalment in leading cryptocurrencies.

People who invested in cryptos in 2020 and most of 2021 invested lump-sum amounts. Investing in cryptos through SIPs on the other hand allows you to stagger your investment, thus reducing risks.

Moreover, SIPs eliminate impulsive decision-making and helps you benefit from averaging of costs, given that cryptos are highly volatile.

Many youngsters have started to invest their pocket money in cryptos for quick profits. They likely invested small amounts regularly even though cryptocurrency exchanges did not offer the SIP facility back then. However, it would be better that they adopt the SIP route as it protects them from big losses if