OKx tutorial | Things You Should Know Before Buying Bitcoin in India
Bitcoin, a word that is now bigger than 99% of Fortune 500 companies in the world in terms of market capitalization, is currently the hot-topic buzzword in the whole world. In the past few months, many Indian investors have been buying Bitcoin in India.
In fact, according to the data, there are currently 7-8 million Indians who have Bitcoin holdings. In fact, the keyword “Bitcoin” for the January month of 2021 reached its all-time high in terms of the Google Trends Index with a perfect score of 100.
And if you haven't heard about the word “Bitcoin”, let us do the honors for you.
Bitcoin is a virtual/digital currency that has been built on Blockchain Technology. Bitcoin is a digital currency that is created, distributed, and stored in a distributed ledger system. There is no particular authority that governs Bitcoin.
Things to Know Before Buying Bitcoin in India
There are certain common things that we should all know about Bitcoin irrespective of where we are, where we belong to, and what we are. These things are for the global audience which is applicable to everyone and not just for buying bitcoin in India
Just like any other asset/commodity in the free market, Bitcoin is also volatile. However, the magnitude of volatility is on a higher side because of the unregulated ecosystem it breeds in.
Bitcoin is not blockchain technology
Many people often confuse blockchain technology with Bitcoin and consider both of them to be the same. But in reality, they are not. Bitcoin is an application of blockchain technology. Just like how Facebook is an application of the Internet.
Importance of Keys
Unlike FIAT currency which is stored in Bank Accounts headed by a group of people, Bitcoin is completely different. Bitcoin is stored in “Digital Wallets” often known as just “wallets” or “Bitcoin Wallets” that can only be accessed by “Private Keys”. Private keys are like passwords to your digital wallet. Also, every wallet is identified by a “Public Key” or ”Public Address” or just simply “Address” which acts like a bank account number to the wallet which the receiver can share to receive funds in his/her wallet.
Types of Digital Wallets
You can utilize the truest and rawest form of decentralized power of Bitcoin if you own the private keys of your Bitcoin wallet. Bitcoin wallets are of many types: Hot Wallets & Cold wallets. In the case of hot wallets, we have exchange wallets and non-exchange wallets. Exchange wallets are the ones where the private keys of your digital wallet are not held by you but by the exchange owners. While in the case of a non-exchange wallet, you are solely responsible for your private keys. In the case of cold wallets, they are not connected to the internet and considered to be most secure and safe.
Bitcoin is bubble
Many critics of Bitcoin tag it to be just a bubble that is going to burst soon. They call it a speculative market. However, the price of Bitcoin varies on a lot of factors other than just speculation. There can only be 21 Million Bitcoins that can ever be mined. This makes the supply limited. Bitcoin transactions are fast and cheap compared to the rest of the monetary transaction systems, making them more demanding. Hence, the basic demand & supply economics makes Bitcoin prices rise more and more.
About Buying Bitcoin in India
India’s Bombay Stock Exchange (B.S.E) is considered the oldest stock market exchange in whole Asia. This means that trading is inbuilt in the blood and sweat of Indians. However, when it comes to Bitcoin trading, there is a bitter-sweet relationship.
When it comes to Buying Bitcoin in India, it’s the government vs the people. According to OKX data and many other independent survey reports, India has around 6-7 million Bitcoin holders who are trading on a daily basis.
In this segment, we are going to talk about the current scenario of Bitcoin in India from all perspectives. Be it legal, regulatory, government, or public sentiments!
Legality – Indian Government Stand
Since the time Bitcoin started becoming popular in India, the Indian Government had an orthodox stand for it. It all started way back in March 2018 when RBI (Reserve Bank of India), India’s Central Bank had put a shadow restriction on fiat transactions between Banks and crypto exchanges. Although the restriction was lifted by the honorable Supreme Court of India in March 2020, things are still looking gloomy at the time of writing this article (dated: February 17, 2020) due to the proposed Crypto Bill that is yet to be discussed in the Parliament Budge.
Stands of Bank in India
Following the honorable Supreme Court’s verdict, all the Indian Banks currently (at the time of writing this article, February 17, 2021) are accepting and facilitating crypto exchange-related transactions in India. However, many crypto exchanges are still advising their customers not to mention keywords like “Crypto”, “Bitcoin” in their payment remarks while buying bitcoin in India to be on a safer side.
Premium/Discounted Price of Bitcoin
Bitcoin price in India also depends on the local market sentiments as well. This majorly includes the local demand and supply which is usually influenced by international Bitcoin price movements and local government regulations. For the most part of the year, Bitcoin in India is usually traded at a premium price compared to the international exchange price.
Bitcoin In India is having a roller coaster ride at the moment. India’s financial regulatory bodies like SEBI (Security Exchange Board of India) & RBI (Reserve Bank of India) are some of the strongest regulatory bodies in the world. Their risk assessment is very clinical which comes at a cost of wait & watch kind of an attitude. Hence, it might take some time to get a nod from these regulatory bodies when it comes to buying bitcoin in India.
For a short-term basis, the future of Bitcoin in India seems gloomy due to the unregulated and grey area of its working. But that being said, in terms of long-term investment, the kind of blockchain-based startups that are coming up in India and more retail investors are jumping in for mass adoption, Bitcoin in India seems to be inevitable.