Dhanteras 2021: Most Indians consider festivals to be an auspicious occasion to invest in gold and other assets. Gold is generally considered the safest asset class to invest in. However, investing in gold also has its challenges. The first challenge is that when kept in the house, there is a fear of it being stolen or lost. In such a situation comes a problem of keeping it in a safe place. The second challenge is that investing in gold requires a lot of money. Apart from this, the return on investment in gold is also very low.
Benefits of investing in cryptocurrencies
In today’s time, investors in India have started investing in asset classes other than gold for diversification. In this sequence, many people are now investing in cryptocurrencies as well. Cryptocurrencies have managed to outperform every other asset class today. This asset class has given investors much better returns than they expected. It is completely digital, which means investors need not worry about its storage like gold. Along with this, one of the advantages of investing in cryptocurrencies is that you do not even need much capital for this.
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Cryptocurrency platforms trying to woo Indian investors
As the awareness about cryptocurrencies is increasing among the investors, they are coming forward to invest in it. Many cryptocurrency platforms are trying to woo Indian investors during this Dhanteras. There has been a huge surge recently in referral campaigns and other promotional activities to entice investors to cryptocurrencies. In addition, several platforms are also educating investors about how to invest in cryptocurrencies. The result of these efforts will be that gradually people will see it as an asset class, which will help in building wealth in the long run. This Dhanteras may be the right time to take steps towards starting a systematic investment plan in crypto.
What is the right way to invest in cryptocurrency
- Choosing and diversifying some of the top cryptocurrencies can be the best way to invest in it. Cryptocurrencies should be viewed as an asset class. Many people want 100x returns in just a few days and for this they jump into cryptocurrencies. With this motive, investors invest without thinking and because of this they incur a huge loss. This investment method is not right.
- The best way to invest in this asset class is to first look at the top 10 cryptocurrencies by market cap. The best way to start your crypto investment journey is to bring about diversification through investing in these tokens.
- After spending some time and experience in the market, investors can move towards tokens with lower market cap and intelligently generate higher returns.
- Cryptocurrency is not a get rich quick plan. Investors should understand that all types of investments carry a risk. Cryptocurrencies are still an un-regulated asset class, so there is more risk involved.
- Investors should not invest more than 5% of their total assets in crypto. Investors often suffer big losses in the pursuit of higher returns, so these methods of investment should be avoided.
- Proper investing in cryptocurrencies can generate returns of 5% every month. This means that investors can double their capital in just one year. Any sane investor would happily accept such returns.
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This Dhanteras can be the right opportunity to take the first step of investing in cryptocurrencies and start your investment journey. This asset class should be in every savvy investor’s portfolio. High returns can be generated by investing in this. The best way to invest is to diversify your portfolio. This means that apart from investing in crypto, investors should also invest in different asset classes such as stocks, real estate, gold and fixed income products such as fixed deposits.
(Edul Patel is the CEO and Co-Founder of Mudrex, a global algorithm-based crypto investment platform. These are his personal views.)
(Suggestions/recommendations regarding cryptocurrencies in this article are given by the respective commentators. Financial Express Online takes no responsibility for their advice. Please consult your financial advisor before transacting/investing in cryptocurrencies.)
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