In our previous blog posts, we have mentioned the need to diversify your portfolio by investing in equities overseas. But one asset class that has gained enormous prominence over the past few years, is cryptocurrencies. There are a few things to consider before you invest in crypto from India.
You may have already started investing in international equities, like hundreds of thousands of Indians. But some hesitancy remains when you want to invest in crypto from India. It’s not only due to the volatility and uncertainty that comes along with it but also because of the legal status of cryptocurrencies in India. RBI imposed a ban on cryptocurrency transactions in April 2018 but was lifted by the Supreme Court in March 2020.
Despite the court’s orders, India’s central government proposed a bill recommending a ban on investing in crypto from India, including bitcoin and dogecoin. However, there has been no further development on that. The RBI came out with its own circular on June 8 this year, stating that their April 2018 orders no longer hold after the Supreme Court judgment.
On the banks’ part, they cannot take action against investors in virtual currencies. They have to continue to carry out customer due diligence processes in line with regulations.
Cryptocurrencies have had their fair share of volatility this year, but some of them have given returns more than a long-term equity portfolio would ever do. Even after nearly halving from its peak, Bitcoin is still up 30% this year, while Ethereum has tripled.
Seeing these returns, you may be eager to invest in crypto from India. However, the legality of doing so from India may have stopped you from investing directly. Here’s the good news: you can invest in crypto assets (somewhat) without investing directly in cryptocurrencies.
Investing in US stocks is an activity that the RBI has permitted for many years. Here are three stocks that you can consider, which correlate well with cryptocurrencies: