How to start and stop using crypto? Simple guidance that allows you to leave or join the digital world safely

The world of cryptocurrencies is very enticing and is now much easier for a user to access and tinker with. However, like any other option that involves financial considerations, this comes with its own set of dos and don’ts. We will explore the very basics that an end user needs to understand in order to get the most out of this market.

1. How to enter the market – Step-by-step guide

As a user, you can enter the market by registering with any of the cryptocurrency platforms that allow Indian users to trade on their platforms. Although it is the easiest thing to register on any platform, it is important for you to know more about the nature of assets that you want to deal with. Unlike the other forms of securities and assets that you may be familiar with, trading cryptocurrencies will mean that you should have a basic idea of ​​the underlying blockchain technology, the country of origin and the social and political implications that can lead to price fluctuations. of the cryptocurrency. In the past, tweets from celebrities like Elon Musk have led to erratic swings, and you need to be aware of all of these before you either end up buying more or selling everything.

Most importantly, you can’t put all your eggs in one basket and buy many of the same coins for your portfolio, try to diversify the nature of your investments.

1. What do you need everything?

You must:

1. identify a cryptocurrency broker or cryptocurrency exchange;
2. register with the identified broker/exchange to open an account;
3. meet KYC requirements, including provision of your PAN details;
4. deposit cash (fiat currency) – this is usually validated by the UTR number of your NEFT transfer on most platforms;
5. place your cryptocurrency order;
6. select a storage method.

When you buy it from an exchange, it is usually stored in the wallet attached to the exchange. If you do not want the exchange to store them, and you want it to be moved to another more secure location, you can choose between a hot or a cold wallet. A hot wallet is a crypto wallet that is stored online and runs on web-enabled/connected devices, such as computers, phones. These are convenient, but they are accessible via the internet, and so a certain level of vulnerability persists.

In contrast, a cold wallet is a crypto wallet that is not connected to the internet and takes the form of an external device such as a hard drive or a USB pen drive. Since it is stored offline, it is treated as one of the most secure forms of storage; with a key code attached. As a cold crypto wallet user, you need to ensure that your device remains safe and that you have the code, otherwise you may never get your cryptocurrency back. This has happened, so be careful.

1. Step by step instructions on what to do if you want to leave the crypto/Bitcoin industry

Since the industry is volatile, there is no set or prescribed method of exiting this industry.

1. One of the simplest solutions would be to set a price target and exit the market at that point. For example, if you bought a particular crypto asset for INR 2000 and you can set the target sell price at INR 2500 and accordingly sell your crypto asset when it reaches that amount.
2. You can also choose to end with a return percentage; and consequently when this target is reached, you can sell half of your investments and sell the other half at a similar target return price.
3. Some also prefer to exit by portfolio. For example, if you have made an investment of INR 500,000/- and after a certain period of time you feel the need for around INR 750,000/- if your crypto asset portfolio has reached that limit, you may prefer to sell the assets and exit the market.
4. It is also possible that you set a day, a week or a month to sell a percentage of your investments. Let’s say you want to sell 10% of your investments in a periodic manner, by the end of 10 cycles, you would have sold the entire investment.

These are not the ideal scenarios, but these are one of the many available for you to practice.

1. What are other options to join?

Considering that not everyone would be comfortable buying cryptocurrency directly, due to its volatility, you can always consider investing in the companies that are connected to cryptocurrency. This will be a comfortable proposition for anyone who intends to invest in companies with better regulatory oversight and can still keep you belonging to the blockchain/cryptocurrency ecosystem.

As a parting piece of advice, as is the case with any other type of investment, make sure that your financial risk appetite, investment goals are consistent with the expectations and possible outcomes of this particular venture. These are highly speculative investments and require you to invest with great caution and careful consideration.

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