Mint Money Festival: Is it worth investing in cryptocurrencies, an unregulated asset class in India?
Imagine a fixed-income investment advisor who tried out crypto assets and then got converted. That’s what happened with New Delhi-based Shiv Pande, who worked closely with pension and provident funds and became curious about the stupendous rise of crypto assets in 2021. He spent a year researching it and invested in it for the first time in July 2022.
«I started my research purely from the knowledge perspective so that I don't appear clueless when my clients talk to me about it. I felt I should understand all about it before I write it off or look at it as an investment option,» said Pande.
Initially, he allocated 1-2% of his monthly investment to crypto, taking it to 30% now.
«My two-year compounded annual growth rate (CAGR) has been roughly 150%,» said Pande.
While Pande invested in crypto assets such as Bitcoin, Ethereum, Arbitrum and Uniswap, he continued his systematic investment plans in mutual funds, exchange traded funds and contributions to the National Pension System.
Pande's story is similar to many people who made good money from crypto. It is an asset class for the young generation that understands technology, Ashish Singhal, co-founder of CoinSwitch, a crypto exchange, said at the Mint Money Festival on 22 November.
«At least 4-6% of the portfolio should be kept in crypto. But I emphasise it is a risky investment. They should diversify in other asset classes too,» said Singhal.
Data from CoinSwitch shows that Bitcoin has rallied 50% so far in 2024. It fell 64% in 2022. Its standard deviation, the variation from the average price, is too high at 155% compared with 13% for the S&P 500. The greater the standard deviation, the higher the volatility of an asset class, making it a riskier investment.
Singhal said
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