Cryptocurrency has gained a significant following in India, with a recent survey revealing that 32% of Indians have purchased cryptocurrencies at some point, and 21% still own digital assets. Bitcoin (BTC) remains the dominant cryptocurrency in the country. Despite a 30% tax on income from digital assets, the sentiment towards cryptocurrencies remains strong in India, and the digital assets market is projected to reach $241 million by 2030.
This article provides a comprehensive guide on how to buy Bitcoin in India through various methods, including centralized and decentralized exchanges, systematic investment plans (SIP), over-the-counter (OTC) deals, and direct peer-to-peer (P2P) exchanges.
To buy Bitcoin on a centralized exchange, one needs to consider factors such as ease of use, security, and low fees. The registration process includes verifying phone numbers and email addresses. The next step is the Know Your Customer (KYC) procedure, which requires submitting identification documents. After verification, one can buy Bitcoin through OTC or P2P trading on the exchange.
Decentralized exchanges (DEX) facilitate peer-to-peer transactions without the involvement of intermediaries. Smart contracts execute transactions based on participants’ input. DEXs do not hold users’ funds, providing users with full control over their digital assets. However, DEXs currently do not support buying Bitcoin with fiat currency, so users need to transfer another cryptocurrency for Bitcoin.
Systematic investment plans (SIP) offer a disciplined approach to regularly invest in Bitcoin over a predefined period. Users can capitalize on market fluctuations while retaining their portfolios for a long time. To invest in SIPs, one needs to download a service provider’s app, complete the registration and KYC procedures, and select the relevant options.
Direct P2P crypto transactions can be conducted through on-exchange or off-exchange methods. On-exchange transactions involve using a P2P service on a crypto exchange platform, while off-exchange 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 payment options, including bank transfers, debit cards, credit cards, and digital wallets, are available for cryptocurrency transactions in India. Crypto exchanges in India accept bank transfers via Immediate Payment Service (IMPS) and Unified Payments Interface (UPI). Sellers may also accept payments through other modes such as Paytm and Lightning UPI. Payment with other cryptocurrencies like Ether, DOT, and ADA is also possible.
After buying 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. It is advisable not to leave Bitcoin with the exchange and instead opt for offline storage options like hardware wallets and paper wallets. Mobile wallets offer convenience, while desktop and online wallets provide security comparable to exchanges.
Indian law requires individuals who have made gains from trading virtual digital assets, including Bitcoin, to pay taxes. Compliance with tax regulations is the responsibility of exchanges when buying Bitcoin on Indian exchanges. For international exchanges or P2P transactions, buyers and sellers must ensure compliance.
While purchasing Bitcoin in India presents investment opportunities, it is crucial to consider regulatory uncertainties, market volatility, and policy changes. It is essential to assess one’s risk tolerance, understand market dynamics, and stay updated on regulatory developments before making any investment decisions.
Disclaimer: This article does not provide investment advice or recommendations. Readers should conduct their own research and assessment of risks before making any investment decisions.