Is Buying Crypto Different From Investing in Crypto?

PayTM, PhonePay, Google Pay, this is what comes to our mind when we hear Online Cash. 

But you know there is something, which in literal meaning, is digital cash, That is Crypto Currency.


What Does Cryptocurrency Mean?

The word Cryptocurrency has derived from the words “Cryptography” and “Currency”. 

It is a digital cash which can be used in exchange of goods and services.

Cryptocurrency in India

Developer Satoshi Nakamoto was the person who created the first decentralised currency, bitcoin, in 2009

In 2013, Cryptocurrency was made accessible in India.

But due to the matter of speculation of prices, RBI issued an advisory against the use of virtual currencies. In 2018, RBI banned the cryptocurrency completely.

In March 2020, the Supreme Court overruled the ban. 

Due to the global lockdown in 2020, interests in cryptocurrencies spiked globally.

And Now it is completely legal to buy or to invest in Cryptocurrencies.

How to Buy Crypto?

For using the cryptocurrency in exchange of goods, a person needs to buy crypto. 

So let's take a look at how to buy cryptos.

• First of all you need to find a platform for buying or selling crypto.

• These platforms are just some crypto exchange apps, which are easily available on google and apple play stores. For example, WazirX, Unocoin, CoinSwitch Kuber etc. These apps allow the users to exchange cryptos with other cryptos or flat currencies. Such apps provide security to your cryptocurrency as well.

Once you have signed up to the crypto exchange app, you need to fund your account.

• To begin trading, you need to fund your account easily using flat currencies through credit or debit cards. But this step is different for all the apps.

• Some apps do not support credit cards, as that may be risky. There are some credit card companies too which do not allow crypto transactions.

• In such cases, there are different methods for that. You can deposit money into your crypto account after you link it with your bank account or by authorising a wire transfer. But this may take a few days for a transaction.

• Next, you need to place an order for the crypto.

• Once you have an amount in your account, you can place your order. You can choose from hundreds of cryptocurrencies available. You need to be cautious while choosing the right coin among them. There are some well known cryptocurrencies, like bitcoin, ethereum, tether etc.

• Once you have decided your choice of cryptocurrency, enter its symbol and mention how many coins you want to buy. As these coins are quite expensive, you are even allowed to buy only a fractional share of it.

• Next, You have to store your crypto.

As Crypto is a virtual currency, it can be at risk of hacking or theft or you can even lose your investment if you forget your code. So you must keep your currency in secure storage.

When you buy a crypto, it usually gets saved in a crypto wallet, but for security you can transfer them to separate online or offline wallets.

Following the above steps, you can buy a cryptocurrency and later use them as an asset. In this way you own them.

But Cryptocurrency also allows you to invest in them.

How to Invest in Cryptocurrency?

• Crypto Exchange-Traded Funds: Crypto ETFs are the tools which allow the investors to diversify the funds without actually owning the coins. It is similar to the traditional ETFs where an investor invests in shares. If the value of crypto increases, your investment also increases.

• Investment in Companies which are connected to the Crypto: There are some companies which deal with crypto, you can purchase their stocks using an online brokerage account. But such investments do not assure profit or loss.

How Is Buying Crypto Different From Investing in Crypto?

This difference is the same as in the case of real money. 

Buying Crypto means you own the coins as we own the money we earn. 

Similarly, Investing in crypto is similar to investing in any company or in mutual funds.

Buying Crypto means we can store them in online or offline wallets. 

But we can’t store our investments.

If we invest in a Crypto, we can’t directly use them, we need to convert it to the currency we use. 

While if we buy, we can exchange our coins for coins or goods.


Like every other thing, Cryptocurrency also has some pros as well as cons. Hence you need to be careful while doing investments or transactions in cryptocurrencies.

Written By: Nidhi Jha

Edited By: Komal Jha