Bitcoin has been a popular choice among investors despite its highly volatile nature. The cryptocurrency is in news lately for hitting a new record high of USD 19,850.11. Bitcoins hit a previous high of over USD 19,500 in December 2017 and fell USD 4000 in late 2018.
The value has seen a 170 percent increase in 2020 with dramatic changes in value within a day. On January 11 alone, the price of Bitcoin jumped USD 2000 to hit an all-time high.
Before we look at how Bitcoin can be purchased in India, let’s understand its concept. Bitcoin is a computer file stored in a ‘digital wallet’ app on computer or smartphone. Bitcoin is extremely volatile in nature and it can be transferred or sold to another user for its USD value.
In March last year, the Supreme Court verdict lifted RBI’s prohibition on dealings in cryptocurrencies and made purchase of Bitcoin and other cryptocurrencies legal. But it is important to note that there is no regulatory body to govern the workings of these virtual currencies.
There are many apps like Zebpay, UnoCoin, CoinSecure, among others, that allow users to purchase bitcoins using online payment mediums like NEFT, RTGS, debit/credit cards. The cryptocurrency can be stored in online wallets, software wallets or hardware wallets.
The current price of one bitcoin is over Rs 14 lakh, making it an expensive choice for an average buyer. However, the cryptocurrency exchanges in India allows you to purchase a part of bitcoin with a minimum investment of Rs 500.
One is required to complete the Know Your Customer (KYC) process in order to set-up an account with these exchanges/app and to store the cryptocurrency. Documents required for verification include address proof, PAN and bank account details.
The income earned from selling bitcoin attracts 30 percent tax for short-term investments and around 20 percent for investments of three years.