When it comes to investing, Indians usually choose the one that will bring the maximum long-term return with the least risk
When it comes to investing, Indians usually choose the one that will bring the maximum long-term return with the least risk. While there are many traditional investment options such as stocks and bonds, many Indians are slowly but surely adopting the idea of cryptocurrencies, digital currencies that can exchange value in the future. India's central bank has banned regulated banks from suspending or activating cryptocurrency transactions following reports of digital currency fraud in 2018, but the Supreme Court overturned this in March 2020. Since the ban has been lifted, Indians are increasingly looking at cryptocurrencies as a viable investment option. … But how does it differ from traditional options? Let's see.
Let's start by discussing the difference between cryptocurrency and the stock market. Both cryptocurrencies and stocks have good days and bad days. However, stocks have a long history in helping investors predict the future. Stocks are subject to several types of risks, including commercial and financial risks, market volatility, and government regulation. On the other hand, cryptocurrency is a decentralized structure. You don't have a government or a group of people to control this. A bond is a loan that an individual gives to a company or government. In other words, when an investor buys a bond, the company or country that bought the bond owes that person a debt. The investor receives interest on this amount for a specified period of time, after which the company or government returns the full amount. The main risk associated with bonds is that if the company goes bankrupt, investors will no longer receive interest and capital.
Forex, also known as currency, usually attracts investors to invest in foreign currencies. Cryptocurrency is a currency that is accepted around the world, and investors who choose the currency are also involved all over the world. However, the problem here lies in the different economic conditions of a given country. Investors can expect positive results in the foreign exchange market only if the economy of the country in which they are investing is good. Capital gains in Forex can only be estimated based on the economy of each country. It is riskier compared to cryptocurrency.
The main reason people invest in precious metals today is to buy jewelry and the like. Thus, market sentiment is the only determinant of the price of metals such as gold and silver. Now we have to take risks. The risks associated with investing in precious metals include the need for mobility, import taxes and last but not least, security. On the other hand, cryptocurrencies do not need to be physically transferred to anyone. Since everything is digital, investors can do this relatively easily. Time deposits in cryptocurrency Time deposits are managed by the state. FDs are great when you have long term investment plans that need to wait until maturity. However, those who leave FD before the expiration date can continue to invest in cryptocurrencies. At least the markets there are volatile and people can make decisions quickly. People can exit knowing that the market price fell during the trade.