Cryptocurrency: Newbie crypto investors in India under threat as education delays rush to digital coin

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New Delhi: Cryptocurrency has evolved and been adopted faster than expected in India, but the country has fallen behind in building adequate financial literacy on this product at the same pace, mainly due to regulatory confusion and policies.

This creates a risk as the crypto industry is in its infancy and is inundated with many coins and tokens, much of which will eventually die, putting big investor money at risk.

Cryptocurrency and blockchain experts say India needs to quickly incorporate the knowledge needed to navigate the crypto market and educate potential crypto investors on new aspects unique to this asset class.

For example, Bitcoin has been the best performing asset class over the past decade and the majority of Indian investors have missed the bus, failing to reap the supernatural returns simply for lack of knowledge and familiarity. .

Nischal Shetty, CEO of WazirX, said it was time for India to improve its financial literacy for the 21st century. “Cryptocurrencies, in particular, should be a crucial part of financial literacy programs,” he said.

“Over the past few years, cryptocurrency has become a profitable investment that can be made in today’s economic climate,” said Shetty.

The use of cryptocurrency and investment volumes in India have grown rapidly, placing it on top of the world. Investment in cryptos is likely to increase in the coming days, and this calls for more focus on educating investors about contemporary financial developments.

The domestic crypto exchange CoinSwitch Kuber has launched its own initiative to educate investors. “Since crypto is in its infancy, we have a long way to go in investor education. To close this gap, we have launched a multitude of initiatives,” said Sharan Nair , Commercial Director of CoinSwitch Kuber.

“We advise investors to do their research before investing in a coin. This is the basic rule of investing in crypto, or any other asset class for that matter,” he said.

Indian investors can only take full advantage of the crypto economy if they have sufficient financial knowledge in all aspects of the digital token and blockchain industry.

“The whole philosophy of cryptocurrency places the responsibility for financial management on the individual,” said Tanvi Ratna, founder and CEO of Policy 4.0, a cryptocurrency and blockchain research and advisory firm.

A number of long-time investors have lost large sums on several occasions before finally starting to manage them well and generate returns, she said. “Increasing financial literacy is not a luxury, but a necessity for any crypto investor.”

The cryptocurrency industry recently experienced a healthy bull market after a sharp decline in May. In addition, the rapid adoption of crypto by institutions and its ever-growing support is expected to foster faster growth in the industry.

In recent times, many investors have entered the market with the aim of generating multibagger returns overnight only to end up losing a significant chunk of their wealth when these coins have plunged. This, industry watchers say, is akin to limit gambling, not investing.

Edul Patel, CEO and co-founder of Mudrex, said the growing demand and acceptance for crypto will require a lot of literacy and education among the investor fraternity, especially among the more gullible.

Industry experts say the smart investor has the upper hand when it comes to choosing the right kind of crypto project. “We have recently seen a crazy growth in listings in small towns and villages. A number of these new retail investors have virtually no idea how cryptocurrencies work. This is a major cause for concern,” Patel said.

To date, there are over 11,000 cryptocurrency tokens. Many of them would eventually die and the people who invested in them would lose their entire investment.

Industry watchers say the best way to protect against such destruction of wealth is by acquiring knowledge and developing understanding of the cryptocurrency ecosystem.

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