The popularity of bitcoins in India increased by various times, but still, many people don’t know what bitcoin is, how it works, and why they should invest their money in bitcoins.
The digital currency has enthralled all trading communities worldwide with its phenomenal return of more than 9,000% last year. But some people have never checked their bitcoin wallets since they created them.
Besides being known as digital currency, bitcoins are also called cryptocurrencies because they are encrypted and decentralized. As a result, any bank or government does not regulate this coin’s price, unlike fiat money (INR, USD, etc.)
7 Main reasons behind the popularity of bitcoin in India
- Government of India has sent mixed signals about its future on cryptocurrencies. Some Indian cryptocurrency exchanges have taken the RBI to court over this matter, but there is no visible conclusion for now.
- High price volatility: Bitcoin price rises and falls within hours or minutes. It takes enormous time for fiat currencies like USD INR to see a change in their values.
- Bitcoins are accepted by many online wallet companies and some e-commerce websites. This can be used to buy products on the internet only through bitcoins. India is the fastest-growing market for bitcoins globally. So you must know what bitcoin is, how it works, and how to use them in India before investing. Learn more at bitcoin mining.
- There are only 21 million bitcoins available for circulation. If you know how much supply of these currencies is available in the market currently, you can understand why the bitcoin price is soaring high.
- Bitcoins are hard to track, which means you need to take extreme care while making transactions, or else it will be like handing over blank cheques to someone.
- The value of bitcoins has kept taking new heights since the start of 2017 (approximately Rs 10 Lacs), which means if anyone had invested Rs 50,000 on bitcoins in January 2017, they would be getting returns of more than 5 Cr (approximate value).
- Bitcoin exchanges and traders are also listed in the Indian stock markets, which means bitcoin investment may give you double benefits. ( the biggest plus is to get returns on your money, and at the same time, you can sell them in the stock market when bitcoin price booms high).
7 Reasons why bitcoin is not suitable for the Indian economy
- Bitcoins are hard to track. India is a high cash economy, where currency notes are used for transactions, it is tough to record transactions. Tracking each transaction becomes very complex in this case.
- Bitcoins can be hacked or stolen if proper security measures are not taken while making transactions. That’s the reason why bitcoins are in the news again.
- RBI or any other authority does not regulate Bitcoins, so their value keeps fluctuating according to the supply and demand in the market.
- As per experts’ predictions, bitcoins will become legal in India by November 2018, which means that people who had invested money in it before that will be at a loss because its value will start falling.
- Bitcoins are not an investment that gives guaranteed returns. On the other hand, there are chances that you might lose all your money invested if the bitcoins price crashes suddenly.
- There are only 21 million bitcoins available for circulation, which means if the demand for the currency keeps rising, it will become difficult for people to get hold of them.
- Bitcoin is not a legal tender in India, so you can’t use it to pay for goods & services.
Bitcoin has also been termed the future of finance because its popularity keeps increasing with each passing day and has become legal in many countries across the globe.
Its price has grown more than nine times since last year and crossed Rs 10 Lacs in India, which means if you had invested Rs 50,000 on it last year and sold the same today, your returns will be more than 5 Lakh.
Bitcoins are much better than other currencies, but their price is so high because of the surge in demand and not for any particular reason. Therefore, even though bitcoins have many advantages, there could also be disadvantages to investing in this currency. It is also expected that there might be some restrictions on exchanging a large amount of cash with the help of bitcoins.