Systematic Investment Plans (SIPs) have already been catching momentum amongst Indian investors for some time now. The idea of investing a small amount, but on a regular and dedicated basis is almost a sure-fire way for long-term wealth creation.
No wonder then, the total number of SIP accounts in India for March 2022 stood at 5.28 crore. And miles ahead were the total amount collected through them, a landmark Rs 12,328 crore, according to the data by the Association of Mutual Funds of India (AMFI).
For years now, SIPs have been a solid way to beat the ebbs, tides, wild price fluctuations and volatilities of the stock market. No wonder, it is the chosen investment avenue for all investors who have a long-term vision of building a fortune, and not just make small gains.
It looks like the residents of this wild west of crypto, too, seem to be embracing this systematic, disciplined way of investing. For instance, Tanmay Bhatnagar, who is a Data Scientist at Gamezop, is extremely bullish on crypto in general, and invests in it via SIPs. But he laments that India has steep taxation and ambiguous regulations for crypto.
Notably, the Union Budget 2022 announced the imposition of a 30% tax on any income generated from transacting in such virtual digital assets (VDA). Additionally, a 1% tax deduction at source (TDS) will also be charged, discouraging many investors.
“One of the most popular crypto coins, namely Polygon (MATIC), has Indian founders, namely Jayant Kanani and Sandeep Nailwal. The untapped potential speaks of crypto in India for itself,” Bhatnagar says.
Many crypto enthusiasts also agree with Bhatnagar who believes crypto SIPs have the power to permeate through the masses. At present, CoinDCX, BitBns, Vauld and a few other crypto platforms offer this facility.
Crypto SIPs can in fact encourage even those who presently resist investing in crypto or blindly follow market trends and half-baked peer recommendations to make crypto investments.
“SIPs also help investors average out the wide fluctuations generally seen in the crypto world. Additionally, it will also get a very good response in Tier 2 and Tier 3 cities as SIPs are generally micro ticket sizes making it absolutely affordable,” said Khaleelulla Baig, co-founder and CEO of Koinbasket
Staggering investments in crypto via SIPs instead of directly putting in a lump sum amount has immense benefits. Not only it allows you to take advantage of rupee-cost averaging and earn better returns in market over time, but it also saves you from emotional, instinctive financial decisions that could be potentially loss-making.
“Crypto SIPs are a great tool to accelerate mass crypto adoption, the industry needs to come together and promote crypto SIP concept such as ‘Mutual Fund Sahi Hai’ awareness programme for the phenomenal success. Such SIPs should be in multicurrency crypto portfolios and not individual currencies.
Many companies allow you to start investing in crypto for as low as Rs 100. However, the idea is not entirely new to the dynamically evolving world of crypto. One of the most fundamental ideas of crypto that is HODL-ing is just another version of adopting a long-term investment vision.
“In the Bitcoin market, HODL is an acronym for ‘hold on for dear life’ and is a core philosophy that many BTC maximalists live by. To a hodler, (that is an investor), short term-price fluctuations are insignificant while traders have defined levels of risk,” pointed out Darshan Bathija, CEO & CO-founder of Vauld.
The platform, which also offers AIPs or Automated Investment Plans (AIPs) for crypto has seen encouraging growth. With a 164% increase in the number of individuals opting for these AIPs over the last six months, Vauld has also seen more than 750 APIs being created on a daily basis.
“Out of these, 41% have opted to continue with their AIPs for a longer-term i.e. more than 180 days,” he said.