- High volatility. Volatility is one of the factors driving the crypto market. ...
- Lack of regulations. ...
- Market risks. ...
- Tax-based concerns. ...
- Cyber risks. ...
- Ways to manage the risks involved in cryptocurrency trading. ...
- Understand the Reward/Risk ratio. ...
- Diversify your portfolio.
Is buying crypto safe in India?
Like any investment, Bitcoin is not risk-free. There are many risks to cryptocurrency, from market risks to regulatory risks and cybersecurity risks. Market risk is one of the biggest risks associated with Bitcoin, Rodriguez says.
What are the main risks of cryptocurrency?
A cryptocurrency's value can change constantly and dramatically. An investment that may be worth thousands of dollars today could be worth only hundreds tomorrow. If the value goes down, there's no guarantee that it will rise again. Nothing about cryptocurrencies makes them a foolproof investment.
What are the disadvantages of cryptocurrency in India?
Profits and earnings from the sale of cryptocurrencies, on the other hand, are subject to income tax because software is considered a good and can be taxed as such under Indian law. Similarly, the sale of any capital asset, in this case, cryptocurrency, would result in capital gains tax.
What are the risks of cryptocurrencies?
Some other risks to which cryptocurrencies may be exposed to include storage in an electronic/digital format which exposes them to the risks of hacking, loss of password, malware attack and many other risks that may further result into a permanent loss of money of the users.
Why is cryptocurrency gaining grounds in India?
“Cryptocurrency is viewed as an asset which is underserved by the banking system and because of the factors like inherent security, lower transaction fees, lack of interference from the banking system, easy access and use, and universal recognition, it is gaining grounds in India despite consistent attempts of the government to ban it,” said Dubey.
Is cryptocurrency banned in India?
Indian government has accepted the fact that VDAs are the undeniable fate of Indian economy and IT sector, and it cannot be banned or termed illegal. Therefore, the FM imposed a 30% flat tax rates on all cryptocurrency gains in India in the Union Budget 2022.