How Much to Invest in Bitcoins?

 

Congratulations!

If you are here, I assume that you have in some way thought of investing in bitcoins or cryptocurrency. Suppose you have already decided, let me give you a small pat and say that it must be the best decision you ever made. Otherwise, it would help if you were sceptical about investing in it even though you want to. Either way, once you think of investing in bitcoins, questions such as this should start spinning around your head.  

1. Bitcoin? Is it a good investment
2. How much to invest in it?
3. Where and how to invest?

This article will be laying out some facts that may give some relief to your puzzled mind. 

Before we go any deeper, you should know that this is not a financial advise platform, nor am I a financial advisor. I happen to like money, like anyone else. 

Let us begin by brushing through the basics of Bitcoin. 

Bitcoin Warm-up

• Bitcoin was the first-ever cryptocurrency introduced to us by Satoshi Nakamoto in 2009. 
• It is a digital coin, secured by cryptography and backed by blockchain technology. 
• They are fully decentralized – not controlled by any central authority. 
• It is stored digitally and can be exchanged through cryptocurrency exchanges.
• There are only 21 million bitcoins in total. 

Is Bitcoin a Good Investment? 

It is no news that the value of bitcoins has risen tremendously in the past. However, many potential investors wonder if the cost will keep growing or just a thing of the past. 

The answer is its value is rising and is expected to be long term. In the past decade, bitcoin prices have risen a million times. Anyone who had invested in bitcoins during the early years would have earned unimaginable returns. 

Let us take the example of the past year alone. If you had invested in Bitcoins sometime in the last year, you would have earned a profit of 400%+ today. Its value was somewhere around ₹6,00,000+ in the first half of 2020, and now it is trading around ₹33,00,000+.

Anthony Pompliano, a well-known Bitcoin personality, holds more than 50% of his assets in Bitcoins. When the bitcoin price crossed the mark of $10,000, he predicted that it would hit $1,00,000 by the end of 2021 owing to fixed supply and increasing demand. It means that the value of bitcoins could increase by 1000% in just two years. (this is just a prediction though)

How Much to Invest in Bitcoins?

We have clearly established that bitcoins are here to stay, and its value might keep increasing day by day. Let us now address your next big question.

How much should anyone invest in Bitcoins?

Well, there are no hard and fast rules as to how much of your net worth can be invested in Bitcoins. It can vary from one person to another. But the most fundamental question to be addressed is “What is your risk tolerance?”. Bitcoins are highly volatile, and the prices tend to fluctuate based on demand and supply. 

If you are a risk-friendly investor, you can easily invest up to between 5% to 30% of your income or savings into Bitcoins. If not, it would not harm in keeping a few thousand invested in this asset. 

Let us say that you have a minimal income but can shove away  ~₹1000 or ₹2000 a year. Investing in Bitcoins may not make much of a difference even if you are to lose it. But think of it in terms of returns. In the current trend, bitcoin price has gone up by more than 200% in the past three months, which means ₹1000 would have become ₹2000 in a quarter. 

But I would like to emphasize that this is just my opinion and not a recommendation to invest. 

Andreas Antonopoulos, a famous Bitcoin evangelist, gives another perspective to it. How much you invest in bitcoins should be equal to your understanding of the technology of bitcoins and your ability to absorb the risk it entails. 

If followed, this equation can keep you from over committing to the currency and can be a good starting point. 

Like I mentioned earlier, there is no one size fits all when it comes to investment. But you can assess your risk appetite, capital availability and knowledge of the subject carefully and make an informed decision. 

This brings us to another pitstop.

What is the minimum amount required to invest in Bitcoins? 

In India, most platforms offer a minimum investment requirement of somewhere between ₹100 – ₹500. 

It may not hurt to start with ₹100 and see if the returns are favourable to you and dabble in the market before making a big decision. 

Where to Invest in Bitcoins?

Many trading platforms have emerged in India in recent years. These platforms act as exchanges and facilitate peer to peer transactions and convert INR to Bitcoin and vice versa. This is where you need to be vigilant while choosing a platform that is both secure and accessible.

CoinSwitch Kuber offers the best market rates in the country and secure wallet transactions and can be accessed globally. There are more than 100 cryptocurrencies available on the platform. Sign up anytime and get your KYC processed in less than 7 minutes. You can start investing with a minimum of ₹100.