India’s crypto SIP boom. Is it your time to invest?

India’s crypto SIP boom. Is it your time to invest?

The first mutual fund SIP was established in India about 30 years ago, and today the sector is valued at over INR 1 lakh crore and growing by almost 10,000 crores each month. putting a lot of money into high returns, little risk, and strict controls One of the most sought asset types for the average investor today is SIPs in mutual funds.


SIP has demonstrated throughout the time that it can reduce volatility, whether it is with stock or mutual funds. The investing technique, which capitalizes on the power of compounding, has assisted investors in generating profitable returns, particularly when reinvested profits are involved. While returns and risk are the main determinants of investment decisions and are closely connected, a high-return, low-risk investment is a desirable option for many investors. One of the most well-liked asset classes that have recently attracted a lot of investor interest in cryptocurrency.


In addition to skyrocketing market valuations, amazing breakthroughs, real-world use cases based on Blockchain technology, and the confidence showed in the sector by the investor community, including the institutional type from across the world, have been some of the key growth factors. Nevertheless, despite this enormous growth and popularity, volatility has been a source of worry, leading many passionate investors to choose to take a cautious approach. Following the SIP method in cryptocurrency, which is quite similar to stock and mutual fund investing, may help to provide greater risk-adjusted returns even during a tumultuous market. 


Volatility is a normal component of market activity and is regarded as beneficial since it helps with market correction and offers opportunities for profit. A smart spread in regular intervals, such as daily, weekly, or monthly through SIP, may help investors fight volatility. However, investing in a lump sum in the face of excessive volatility may not be a good option. SIP in cryptocurrency, which is supported by a methodical approach, comprises the systematic investment of a certain sum of money at predetermined intervals into one specific cryptocurrency or a crypto basket of the investor’s choice.


Why should you fund your Systematic Investment Plans (SIPs) using cryptocurrency?

sip: Sensex at 60,000: Is this the right time to stop your equity mutual fund SIPs? - The Economic Times

Systematic investment plans, which are similar to stock and mutual funds, provide a safer and preferable option, especially for cautious and novice investors. The investing approach enables an investor to take advantage of a better price point for entry even in the face of significant volatility through routine and timely purchases.


 Benefits of crypto SIPs

Stagger your investments to take advantage of the market volatility | Mint

  • Mitigate volatility – With a crypto SIP, an investor often buys certain quantities of bitcoin on a monthly basis at various price points, allowing him to mitigate the effects of volatility. Although SIPs may be used to invest in cryptocurrencies on a daily, weekly, or monthly basis, given the recent volatility, it is advised that investors choose daily or weekly frequency rather than a month-long window.
  • Pocket Friendly – SIPs, whether in stocks, mutual funds, or cryptocurrency, have historically shown to be incredibly cost-effective ways to accumulate wealth. Depending on their preferences, investors can begin their investing adventure with as little as $75 or $100 each day and can choose to invest daily, weekly, or monthly.
  • Auto investments – When a SIP plan is in place, a predetermined sum is automatically deducted from a person’s account at the necessary intervals. Along with reducing volatility, this method also makes it unnecessary to consider each purchase before making it. To passively develop a strong cryptocurrency portfolio, one may also set up many SIPs across various cryptocurrencies.
  • Leveraging the power of compounding – Compounding can help to successfully reduce cryptocurrency volatility. One can reinvest their gains through SIP in addition to making regular investments to build wealth. In this case, one can benefit from the rewards produced by long-term lock-in of investments by utilizing the power of compounding.
  • Disciplined investing – SIP can support the development of a regular saving habit by promoting disciplined, consistent investing. The SIP instalment is automatically withdrawn from one’s account each month as soon as salary posts to the account when a monthly auto-debit plan is in place, much like EMI payments. This helps provide passive income that may be put toward new investments.


Similar to mutual funds and stocks, SIPs in cryptocurrencies should be used as part of a long-term investment plan. Although it can take some time to see benefits, it might provide greater profits while reducing risks. The long-term view helps reduce risks associated with impulsive investment decisions, especially in the wake of significant market volatility, in addition to maximizing profits through compounding.

Ukraine crisis: Crypto falls by up to 10%; should you buy the dip? - BusinessToday

To be able to make the best investment choice at the correct moment, it is crucial to comprehend and analyze cryptocurrencies just as it is for any other type of investment. By methodically investing in a single token or a variety of tokens, investors may diversify their holdings and create a crypto portfolio through SIP in addition to simply taking the leap. While experienced investors with a higher risk tolerance may choose to examine stablecoins like Tether, Polygon, and Solana, beginning investors may want to focus on well-known tokens like Bitcoin and Ethereum.

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