Generally it is rare to see when an exchange issues a warning about the business of any stock or commodity or crypto currency (online currency exchange). In Sept, India's leading Bitcoin exchange did this. In the advice sent to its investors, the Exchange said, "Both the purchase and sale prices in India are more than international prices due to the high demand and low supply of bitcoin. Please be careful because bitcoin prices have remained volatile and their business is linked to the risks of the market. "
Cryptocurrencies have gained great popularity all over the world. Almost every day a new cryptocurrency is being offered. Japan has approved cryptocurrency as a valid currency. After this there was considerable increase in their acceptability. Knowledgeable Indian investors are also riding on the wave of cryptocurrency. Because this is a new category of assets, they need to know about its risks. Also money should be invested with complete caution.
Rising prices
The main reason for the rise in the popularity of cryptocurrency is that it has given investors nearly 670 percent returns in the last one year. Some other popular crypto currency has delivered even more returns.
Price Fluctuations
Investors who bet on crypto currency have to be aware of its risks. Most financial schemes and instruments in India come under the jurisdiction of a major regulator, such as the Securities and Exchange Board of India (SEBI), the Reserve Bank of India, or the Insurance Regulatory and Development Authority (IRDA). There is no regulatory authority for cryptocurrency. If something goes wrong, there is no such authority, where you can take your grievance for redressal.
It is also a risk to buy and sell crypto currency, unaware of each other. If someone stole your cash then it is difficult to identify that person. Similarly, if someone hacks your computer or the cloud (where your wallet is) and stole your crypto currency, it is difficult to find the thief. Tiwari says, "India's crypto currency exchange adopts the stringent KYC (Know Your Customer) standard. If a person of India steals your crypto currency and tries to sell them on any Indian exchange then it is possible to find a thief. '
Fraudulent schemes increased
There are many pension schemes related to bitcoin. Some fraudsters are promising to give 8 to 10 percent guaranteed returns every month, who invest in them through bitcoins. At present there are around 1,077 crypto currency in the world and almost one crypto currency is being offered daily. After purchasing bitcoine from any Indian exchange, you can be nominated in any international exchange and can purchase and sell your bitcoin for other crypto currency.
Invest in Established Crypto Currency
Some dealers (not the exchange) can promise you that if you also pay them cash (usually you transfer money from the bank account to the exchange) they will help you buy bitcoin. That is an extremely risky proposotion and it is advised to steer clear of such transactions and people
Multiple exposure
There is always a risk that they take cash and do not transfer bitcoin into your account. After all, this risk is always that your bitcoin can be stolen by hackers.
What you should do ?
To reduce the risk, you should make limited investment in crypto currency. Conventional wisdom states that you should not invest more than 10% of your portfolio in this asset category. You should invest that amount, which you can afford to lose.