The cryptocurrency market in India is expanding exponentially, with investments surging from $28.10m in 2020 to $438.18m in 2021, data from the startup tracking firm Tracxn showed. The growth could be attributed to the rally in cryptocurrency prices over the past couple of years, drawing young investors towards the newest asset class as they look for alternate investments. In addition, the user-friendly interface of the crypto platforms and the ease of trading make them extremely popular among the masses. Although cryptocurrency trading is still nascent in India, over 230 startups are operating in this space, adding to the growing investment from institutional and retail investors.
Last year, domestic crypto exchange CoinDCX became India’s first billion-dollar crypto unicorn. The exchange offers more than 200 coins, has over 10 million users plugged into its app, and is integrated with international crypto exchanges such as Binance and Huobi.
The Best Crypto Brokers in India
Cryptocurrency brokers are typically middlemen between buyers and sellers. However, unlike some highly liquid OTC products such as FX, cryptocurrencies are not that liquid. So, it is vital to sign up with a cryptocurrency broker in India that not only offers zero or low account opening charges, low transaction costs, and commissions, but also ensures high-speed order execution. In addition, the best crypto brokers also provide advanced technical features on their platform, besides good leverage if you’re looking for it and the choice of a downloadable desktop platform and mobile application.
| Broker | Features | Min Deposit | EURUSD Spread | ||
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 76% of CFD traders lose money
US Clients: No Regulated : Yes
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$50 (varying by Country) | from 1 |
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76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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 Your capital is at risk
US Clients: No Regulated : Yes
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$500 | From 0.6 pips | ||
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Trading Cryptocurrency in India
The cryptocurrency market in India is one of the fastest growing in terms of trading and investment. Although cryptocurrencies are mainly unregulated and cannot be used to buy products and services, unlike in some developed economies, individuals are allowed to legally invest and trade in digital currencies.
However, there are a few drawbacks regarding the mode of payment to transact in digital currencies. Currently, the Indian government has banned online payment methods such as UPI and other applications, citing regulatory issues. So, the best way to trade or invest in digital currencies is via the banking channel.
On the taxation part, cryptocurrencies are categorised as virtual digital assets (VDA) in India and come under the Income Tax Act, with gains taxed at the rate of 30%. However, losses on crypto trading cannot be offset against your other taxable income. In simpler terms, crypto gains are taxed, but you don’t get any relief in the case of losses.
Crypto Brokers vs. Crypto Exchanges
Cryptocurrency brokers are also known as centralised exchanges as they act as intermediaries between buyers and sellers and, in many instances, could also serve as market makers. In addition, crypto brokers might own many cryptocurrencies, which they sell via their platform, making them direct sellers. Although you don’t essentially need a crypto broker to buy or sell digital currencies, they come in handy if you face technical issues on your blockchain. In addition, some brokers allow you to leverage your positions, thereby increasing your exposure several times your primary investment. As crypto brokers charge a fee for their services, they ensure that your trades are executed promptly, with as few glitches as possible.
On the other hand, cryptocurrency or decentralized exchanges are marketplaces that allow peer-to-peer transactions of digital currencies without the need for an intermediary. As you’re directly trading with a counterparty on a crypto exchange, you are protected from market manipulation and hacking risks. However, these exchanges do not allow you to exchange fiat currencies for digital ones. So, unless you already own digital currencies, you cannot possibly trade on decentralised exchanges.
How to Choose a Safe Crypto Broker
Unlike some Western countries, India’s cryptocurrency markets are primarily unregulated. So, the onus is on the investor to choose a safe crypto broker. If you’re trading CFDs on cryptocurrencies, you will find several brokers regulated in Europe, the UK, Australia and Singapore that also offer services in India. They would be your safest bet. Another way to choose a safe crypto broker is to go through online reviews, which would not only give you an insight into the product offering of the broker, but also provide other information that could be non-existent or unrealistic. Look for warning signs before signing up.
Summary
If you compare other financial asset classes, cryptocurrencies rank among the most lucrative, yet they are highly volatile as they’re not as liquid as the others, such as equities, commodities or forex. If you are searching for crypto brokers, India offers hundreds of domestic and international firms. There is a wide range of digital assets to choose from. However, since India’s crypto industry is unregulated, it’s challenging to trust brokers and the many digital currencies that are launched frequently. Investing in or trading cryptos is a rewarding business, but choose a transparent broker that offers services in multiple countries. The best crypto brokers are the ones that also operate in the UK, Europe, Singapore, and other countries where there are stringent regulations for financial services firms.