365telugu.com online news,Hyderabad,march 4th,2022:Lakhs of digital-savy Indians are exploring crypto assets as a financial investment,taking cues from the learnings and experience of their contemporaries in other countries, even as India’s regulators work with industry leaders and experts to formulate a reasonable regulatory framework.
Cryptos are decentralised digital assets operating on a blockchain. In simple terms, these assets are to blockchain what stocks are to companies. A stock’s price represents the value the market assigns to a company. A crypto asset’s price is reflective of the business potential of the underlying blockchain technology, or simply the gains the market expects the asset to make.
The total market capitalisation of this emerging yet attractive asset class had touched an all-time high of ₹223 crore ($3 trillion) in November 2021. The price of Bitcoin, the most popular crypto asset worldwide, grew from ₹20.8 lakh ($28,000) apiece in January 2021 to a high of ₹50.5 lakh ($68,000) in just about 11 months. Value of other crypto assets such as Ethereum, Shiba Inu, and Solana also followed broadly similar patterns.
And Indians have taken note, investing over ₹446.5 crore ($6 billion) in various crypto assets, making India the world’s second-largest country in terms of crypto adoption, as per market research firm Chainalysis.But cryptos are relatively more volatile than traditional assets. Consider the oldest crypto, Bitcoin, for instance, which has had several lows and highs. In 2014, the value of Bitcoin dropped 86% to ₹14,886 ($200).
In 2017, it reached a then-all-time high of ₹14.6 lakh ($19,700). In 2018, it fell below ₹2.6 lakh ($3,500) before bouncing back. In 2020, Bitcoin lost 50% of its market value, and by April 2021, it touched an all-time high of₹48.2 lakh ($64,800).
Those planning to experiment with this asset class should do their own research to evaluate the fundamentals and potential of crypto assets. Assess if a long-term investment — typically holding an asset for more than a year — or a short-term strategy is suitable. One’s investment strategy should factor in his or her own risk appetite and cover the fundamentals of a financial portfolio: emergency fund, life and medical cover, and disciplined goal-based investing and saving.
The golden rule of investing, “invest what you can afford to lose,” applies to cryptos, too, and one shouldn’t misconstrue this asset class as a get-rich-quick scheme. Disclaimer: The content of this article is for informational purposes only and is not intended as a substitute for investment or financial advice.