It’s been nearly 5 years since the digital and highly encrypted Cryptocurrency has entered the Indian market. A lot of huge traders are using the giants like the Bitcoin which is the most popular and widely used Cryptocurrency. Indian is one of the largest countries with a fairly large population of Cryptocurrency users, still is not clear about the Cryptocurrency exchanges as RBI the centralized authority has barred the Cryptocurrency operators. In fact, RBI has also blocked the filing of any case on Cryptocurrency in any of the higher courts. The use of this decentralized currency is a big question as the government wants to ban the use of Cryptocurrency but the government can regulate the bitcoins in a planned manner.
The risks involved the crypto exchange
Even if India legalizes the Cryptocurrency exchange there are certain risks that one should be well aware of before investing in the crypto market.
- The market volatility- This year cryptocurrencies have seen a sharp decline all throughout, there has been a sharp decline in the crypto market. So one needs to be prepared about the volatility of the crypto market, as it is something that has always been there. The volatility of the crypto market is the reason why it is said that one should not invest more than one can afford to lose, always invest with an open mind.
- Regulatory policies- There are a lot of legal issues that surround the Cryptocurrency trading, so there is always that risks that exist. One can never be sure of the trading rules policies or the taxation status related to crypto trading because they can be changed anytime. Investing in Cryptocurrency can be quite risky as compared to other mediums of exchange.
- Protection of consumer- In traditional bands there is consumer protection but in Cryptocurrency, there is no such kind of insurance or safeguard available. The crypto exchanges are encrypted but they can be easily hacked, making one lose all the money. While if something like this happens in a bank then one is sure to get back all the money.
- The scams- Crypto scams are quite known and common, and if you are a new investor then you can surely fall prey to them. Those new to the crypto market should be well aware of the two common crypto scams the ICOs and the Twitter bots. People do not do proper research before entering the market, resulting in a loss of money due to a scam. So keep an eye on all the crypto scams.
- Human error- A human error is the easiest mistake that can be made, resulting in a lot of risks. If you are not that experienced in trading and investing then crypto trading can be confusing. One can accidentally place a wrong order or lock themselves from their account, these mistakes are common. Be careful and cautious while performing an exchange.
The future of Cryptocurrency in India is not clear, till then we can just wait and hope for the RBI to take an informed decision.