The popular cryptocurrency has many fans in India. Consensus and YouGov did a global survey on crypto and Web3 together. They released a report on June 23, showing that 32% of Indians had bought cryptocurrencies at some point, and 21% still owned digital assets. The report also showed that Bitcoin was the most purchased cryptocurrency. A 30% tax on income from digital assets didn’t change people’s positive feelings about cryptocurrencies in the country. According to a report by the KuCoin cryptocurrency exchange, the digital assets market in India is expected to reach $241 million by 2030.
As the world’s most populous country, with 1.4 billion people, India has many potential cryptocurrency investors. Data from the United Nations Economic and Social Commission for Asia and the Pacific shows that 68% of this population is between 15 and 64 years old, indicating a higher chance of interest in cryptocurrencies like Bitcoin.
This article explains how to buy Bitcoin in India using centralized and decentralized exchanges, a systematic investment plan (SIP), over-the-counter (OTC) deals, or direct peer-to-peer (P2P) exchanges.
How to Purchase Bitcoin on a Centralized Crypto Exchange in India
Catering to millions of potential Bitcoin buyers, India has hundreds of centralized exchanges, both local and international. When choosing an exchange, consider factors like ease of use, security, and low fees. To start, complete the exchange registration process, including verifying your phone number and email. The next step is Know Your Customer (KYC), a government-required procedure where you submit a copy of your ID documents. A team will verify these documents before granting access. KYC helps prevent financial crimes like identity theft and money laundering.
You can buy Bitcoin via OTC or P2P trading on a centralized exchange. OTC trading has a minimum order size. For example, CoinDCX requires a minimum order of 15,000 Tether (USDT) or 12,00,000 Indian rupees, while WazirX OTC Desk handles large crypto volumes worth $50,000 and above.
You can take the P2P route to buy BTC in smaller amounts. The exchange helps by setting up a direct deal between the buyer and seller while acting as an escrow to protect both parties. The exchange holds the money paid to the seller, and once the buyer receives the BTC, the money is released. The buyer can pay in fiat or any other cryptocurrency the seller accepts.
How to Purchase Bitcoin on a Decentralized Crypto Exchange in India
As the name suggests, a decentralized exchange (DEX) facilitates P2P transactions without a central authority. Instead, smart contracts execute transactions based on participant input. Direct transactions between users on the blockchain mean DEXs don’t act as intermediaries. Trades on the blockchain via smart contracts incur a fee along with the trading fee, but this is usually less than on centralized exchanges. Unlike centralized exchanges, DEXs do not hold users’ funds, so users always control their digital assets.
To execute a transaction on a DEX, connect your cryptocurrency wallet to the exchange. DEXs don’t allow buying Bitcoin with fiat currency, so you need to transfer another cryptocurrency to get Bitcoin. Transactions can be conducted without KYC requirements. While transactions on DEXs are currently anonymous, they might become regulated in the future.
How to Purchase Bitcoin via SIP in India
A systematic investment plan (SIP) is a disciplined way to regularly invest a fixed amount in assets at set intervals. SIP allows you to consistently buy Bitcoin over a predefined period. SIPs are common in traditional market instruments like stocks and mutual funds. They let investors take advantage of market fluctuations while maintaining their portfolios long-term.
To invest in SIPs, download the app of a service provider offering SIPs, complete the registration and KYC procedures, and select the relevant option. Then, choose the coin you want to invest in (like BTC), set the day and frequency of the plan, and start the SIP.
How to Execute Direct P2P Crypto Transactions in India
To conduct direct peer-to-peer (P2P) crypto transactions, you can choose between on-exchange and off-exchange methods.
On-exchange P2P: Use a P2P service on a crypto exchange platform. Users register, complete identity verification (KYC), and then browse and start transactions with other users. The platform holds the cryptocurrency in escrow until both parties confirm the transaction.
Off-exchange (OTC): Find a trusted buyer or seller through personal networks or OTC brokers, and agree on transaction terms directly. Payment is usually made via bank transfer or digital wallets, and the cryptocurrency is sent directly to the receiver’s wallet.
In both methods, focus on security and follow local regulations. Direct P2P transactions can be done through exchanges that allow buying and selling Bitcoin and other cryptocurrencies directly between individuals, with various payment options like bank transfers and online wallets.
They typically charge low trading fees, offer noncustodial wallets, and use escrow services to boost security. With features like auto-matching and various payment methods, these exchanges cater to diverse needs while ensuring user safety and reducing the risk of fraud and hacks in the P2P crypto market.
Payment Methods for Cryptocurrency Transactions in India
Crypto exchanges in India allow transfers using bank methods like debit or credit cards via Immediate Payment Service (IMPS) and Unified Payments Interface (UPI). For P2P trading, sellers might accept payments through various modes, including regular IMPS, UPI, Paytm, and Lightning UPI (which offers fast transactions on Paytm with a single click, without needing a PIN).
You can also pay for BTC using other cryptocurrencies such as Ether (ETH), Polkadot (DOT), and Cardano (ADA). However, many sellers prefer stablecoins like USDT and USD Coin (USDC). Note that buying Bitcoin via PayPal is not yet supported in India.