Coins Compare

Additional Useful Information

• An investor can invest any amount in the any coin. Based on the amount the investor invests, the investor will receive the proportionate amount of the coin purchased. In other words, if the market value of one coin of COIN X is ₹1,000 and the investor invests ₹100, the investor receives 0.1 units of the coin.

• Total Purchase Amount	=	Number of Units X Price per Unit
  Total Sale Amount	=	Number of Units X Price per Unit
  Total Gain	=	Total Sale Amount – Total Purchase Amount

• No personal information needs to be disclosed to third parties for cryptocurrency transactions. Personal data protection is high as not a lot of information needs to be provided to purchase cryptocurrency.

Returns *

• Coins do not guarantee any returns. They are subject to market risks as well as coin specific risks.

• Coins are very volatile and therefore, every coin has a unique return over a certain period.

• Since cryptocurrency is a new age investment option, there is not a lot of historical data available since a lot of coins are very recently issued.

• Coins are typically high risk, high reward investments.

Risk Level

• Coins are very high-risk investments.

• Due diligence and research of coins under consideration should be extensively carried out.

Liquidity

• Coins have varying liquidity. It depends on the type of coin. A popular coin such as bitcoin will have high liquidity. However, newly issued coins, or other coins may have lower liquidity.

• There is no lock in period for coins. Investors can buy and sell them as they please on the exchange.

• To gauge the liquidity, investors should look at the trade volume of the coin as well as the bid ask spread of the coin. A higher trade volume, and lower bid ask spread would indicate high liquidity. A lower trade volume and higher bid ask spread would indicate a lower liquidity.

• At any time, investors can place a request for redemption of units. Upon this request, investors will get their money based on the ‘Coin Price’ at the time of sale.

Interesting Facts

• Crypto markets are worldwide. Transactions can occur with any potential investor around the world. For this reason, cryptocurrencies trade 24/7.

• The use of blockchain secures almost all cryptocurrencies. All transactions are kept a tab on and verified by this technology. This means that there is no scope for alteration of records of the transactions and the chances of fraud drop.

• Cryptocurrency is a good way to diversify an investment portfolio. This is because the correlation of cryptocurrencies with traditional investments is not perfect. This means they do not always move in similar directions.

• Not only for paying for goods and services, but cryptocurrency can also be used for donations, tipping, gifting, etc. Cryptocurrencies have a wide range of uses.

Tax Implications

• Profits from cryptocurrencies are taxed at a flat rate of 30% in India.

• There is a 4% cess added as well to the 30% tax.

• Short term capital gains and long-term capital gains are taxed similarly. There is no tax differentiation based on the gains.

• Long term capital losses can be offset with long term capital gains. This avoids any tax on the gains.

• Section 194S levies 1% Tax Deducted at Source (TDS) on the transfer of crypto assets from July 01, 2022, if the transactions exceed ₹50,000 (or even ₹10,000 in some cases) in the same financial year. 

Where To Invest

• https://wazirx.com/

• https://coinswitch.co/