Crypto Investments — What’s Trending, But Tread Carefully

Aug 9, 2022

Gone are the days of traditional currency and age-old investment opportunities in India. Cryptocurrency has been the new talk of the town for a while now. It is a form of currency that is both highly valuable and controversial in equal measure. If you want to find new avenues of investment, cryptocurrency might be just the thing for you.

Understanding Cryptocurrency

Essentially, cryptocurrency is a type of digital asset or currency. Its main difference from the traditional currency is its decentralized maintenance. Traditional currency is often known as FIAT currency. A central authority usually makes the regulation and supervision. Instead, cryptocurrency is decentralized and extremely secure.

What makes cryptocurrency an incomparable asset is its level of security. It is managed and recorded via blockchain technology. This ensures that multiple parties maintain identical records and specifications of each transaction. This adds a layer of security and legitimacy of the currency format.

How is cryptocurrency generated and exchanged?

The count of cryptocurrency is generally finite in most cases. It relies on crypto mining for multiplication. This process generates new cryptocurrencies via verification. One must solve elaborate and complex software algorithms and hash puzzles to verify. Only then new iterations of the currency are added to the ledger. Hence, cryptocurrency exchange or investment is the key to its growth.

The peer-to-peer cryptocurrency exchange is slowly gaining ground thanks to modern-day AI-based technology. Excellent trading platforms have also helped in popularizing it. P2P cryptocurrency exchange allows two parties to exchange digital assets. You can do this without any centralized regulatory body. This is convenient and secure making it revolutionary for the investment sector. Looking to invest in cryptocurrency? Here are things you need to know to take a safe and calculated step into the arena.

Trends on cryptocurrency you need to know.

  • Institutional acceptance:  Cryptocurrency has often faced a lot of flak. The reason is its volatility. However, it has steadily gained a foothold in the mainstream investment market. Major MNCs are slowly beginning to consider cryptocurrency as a legitimate asset class. Well-known institutions are now admitting that cryptocurrency investment is the future.
  • RBI’s take on cryptocurrency: The RBI has been quite skeptical about cryptocurrency. In recent RBI reports, the form of currency has been dubbed as a potential “danger”. Cryptocurrency’s value is mainly derived from a concept and AI-driven mining. So, there is no well-defined basis for its value. RBI has stressed the need for stringent regulatory measures for cryptocurrency in India. Hence, you need to make careful decisions while investing in this market.
  • Indian Finance Ministry’s take on cryptocurrency: The Indian Finance Ministry has echoed RBI’s sentiment. It has been cautious about the cryptocurrency wave from the start. There is potential for cryptocurrency misuse for money laundering. So, the ministry has reiterated the need to deliberate on this concept. The authorities declared cryptocurrency taxes in the recent Union Budget. This has taken it one step toward legitimacy as one of the investment opportunities in India.
  • Decentralized finance: Cryptocurrency is not regulated by any centralized authority. This makes it both an asset and a threat. Thanks to cryptocurrency, the concept of decentralized finance has come to the forefront. Emerging frontrunners of this concept are cryptocurrencies for one and P2P Lending as an alternative mode for investors to lend money and earn high returns. They can help set up a more accessible and decentralized form of investment and trading.
  • The ascent of NFT: NFT or non-fungible tokens have become an interesting addition to the world of cryptocurrencies. It is considered one of the best investment opportunities for growing wealth in the long run. Many investors believe in the potential of NFTs and their upcoming growth. Further, it allows you to access collectibles or art via digital ownership. But, NFTs carry a very high degree of risk. There are instances where people have been duped with scam projects, and their money is lost in a matter of days!
  • Crypto to come under regulations: Cryptocurrencies are bound to be regulated at some point. Regulatory intervention is inevitable for even a small investment in India in cryptocurrency. This can add to the security of the currency. In turn, this will make it one of the most exciting investment opportunities in India.
  • The volatility of the crypto market: Bring the new kid on the block; cryptocurrency is susceptible to volatile conditions. Most of the cryptocurrency worldwide is acquired by a handful of investors. Hence, their trading game can have a big impact on the value of cryptocurrency, making it a volatile market with control of the entire market in the hands of a select few.
  • Blockchain ETFs, crypto funds, and crypto futures: Cryptocurrency popularity has increased recently. As a result, blockchain exchange-traded funds (ETFs) and crypto funds are on the rise. Of course, there needs to be the right kind of regulations. With trading partners like LenDenClub, it can be to become one of the best investment opportunities in the years to come.

Cautions on the crypto market

As with any new product, it is advisable to be cautious while investing in the crypto market. Blockchain technology, which is the backbone of the industry, is complicated. Further, there are regulatory inhibitions regarding cryptocurrency. Hence, it is important to be fully informed before investing. Before making even a small investment in the Indian cryptocurrency market, you must be aware of the crypto market volatility. For instance, the recent fall in Bitcoin and Ethereum, among other cryptocurrencies, wiped out nearly 50% of investors’ wealth, causing considerable losses in a concise time.

Additionally, cryptocurrency is not a verified mode of transaction in a lot of companies. Hence, you must be aware of the limitations of this investment and make an informed decision.

So What’s the Alternative if You’re Looking to Tread Carefully?

P2P lending, an alternative form of new-age investment option allows you to park your money in a much safer environment. If you’re new to the term, check out our P2P lending offerings here:

LenDenClub is one of the leading P2P lending platforms in the country. It offers intelligent online lending solutions. It has more than 2 million registered investors. LenDenClub’s FMPP or Fixed-Maturity Peer-to-Peer lending offers sound returns in a relatively well-regulated environment. They offer reliable and user-friendly investments. You get flexible investment periods ranging from one to five years. You can quickly diversify your portfolio and grow your wealth with the P2P investment option at LenDenClub.

While cryptocurrencies can be a trending form of investment, the reality is that many small investors have burned their hands trying to make a quick buck! Gambling is one thing, but when it comes to investments, patience is the key. In the long run, this will help you emerge as a winner while allowing you to keep your peace of mind in the present.

LenDenClub’s FMPPs is one such product that has zero volatility and offers better returns averaging 10-12% per annum. So why wait, the earlier you start, the better! Invest Now!

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