The traders make a profit when they buy these digital currencies, also referred to as coins or tokens, at a low price and sell them at a higher price.
To decide which cryptocurrency to trade in, Ashwin relied on information from Telegram groups, YouTube and social media, often buying unheard of crypto coins based on advice from these sources.
The volatility among other cryptocurrencies began with Elon Musk tweeting about Tesla not accepting Bitcoins on May 13, this created panic among traders and more began selling.
Most of those in the country, who lost money in the crypto crash of 2021 are small-time crypto traders like Ashwin who find it easy to access trading apps on their mobile phones, but do not have access to the knowledge necessary to crypto trade.
The traders often seek investment tips from WhatsApp, Telegram groups and YouTube channels, that encourage them to buy alternate cryptocurrencies, also referred to as altcoins.
“I was aware of the crypto market in 2017 and started monitoring and actively reading up about the blockchain technology each cryptocurrency is based on.
Nihal says he lost 5% of his crypto investments in this year’s crash but is confident that he will turn a profit in the long term.
“I look at who is the founder of the blockchain project on which the cryptocurrency is based, the people who are backing the project, what real-world issues the blockchain project is attempting to resolve.
Another investor, Kunal Rajan, a sound designer from Tamil Nadu who is based in Los Angeles, says he has allocated 100% of his investment portfolio in cryptocurrencies.
Most of the long term crypto investors investing in digital currencies that TNM spoke to, were people from tech backgrounds or were business people who understand the technology and the risks involved.
I search the cryptocurrency I am trading in, on a website that does analysis,” says the trader, who has also lost money to the crypto crash but was not willing to share the extent of his loss.
He however intends to keep trading, “The interest rates from the banks are low, in crypto the returns are high, but so are the risks,” he adds.
Both Shabari and Ashwin used to trade in stock markets, using apps, for small amounts before entering crypto trading.
Sharan Nair, Chief Business Officer for CoinSwitch Kuber, a crypto trading platform, says since its launch in June 2020, the app has managed to enrol over 70+ lakh users.
And also a steady increase in senior citizens investing in crypto, though not big in number, which was surprising for us,” says Sharan, who adds that a large chunk of those who trade in crypto are youngsters in their first job or still in college.
These people are more susceptible to get entrapped in pyramid schemes and scams,” he says, and adds that new entrants to the market were particularly affected in the recent crypto market crash.
The announcement by Elon that Bitcoins would be accepted as payment for Tesla cars pushed up its prices, which later crashed after he backed out of accepting Bitcoins.
Sandeep Sahoo, Director at Savethem Indian foundation and a freelance Blockchain Developer working with cryptocurrencies warns new Indian crypto traders and investors about ‘Whales’– these are Individuals who hold large amounts of altcoins, making them powerful enough to manipulate its valuation.
Sandeep says that cryptocurrencies such as Bitcoin, Ethereum and other top chart coins will gradually recover by December 2021, but the altcoins holders, who were into short term profit will have to wait for the first quarter of 2022, for any hopes of recovery.