Cryptocurrencies - Why you should not invest in Bitcoin, Ripple, Litecoin

The craze of cryptocurrencies is unstoppable throughout the world.  But some pros and cons cryptocurrency contains with itself. A question arises in many of us a mind’s that whether to invest or not to invest in cryptocurrencies.  Most of us are tip-toeing around the idea of investing in cryptocurrencies but with all the uncertainty that surrounds both in terms of regulations and its legality, we remain cautious. There exist some reasons for which we should stay away from such investments.

Some banks have started stopping the purchase of cryptocurrency with their cards-Recently, Citibank emailed to its customers mentioning in that credit and debit cards cannot be used to purchase cryptocurrencies. Succeeding to this, SBI declared to its customers to be cautious against the risk associated with Bitcoin and other cryptocurrencies. In other countries also the banks and financial institutions are taking precautionary action against cryptocurrencies as these highly volatile and customers who purchase these currencies using debit and credit card may not be able to clear their dues if once they hit hard by a price crash. So Banks are implementing such rules in order to restrict people from purchasing cryptocurrencies with their cards in addition to it create barriers for the new investors to invest in virtual currencies and for existing investors in increasing their investments.

In cryptocurrencies, the price is determined merely on the basis of demand and supply, and speculation. Recently Bitcoin is most popular among the cryptocurrencies and most expensive also with a price over $9,000 as on 26th February 2018. In April 2017 the price of Bitcoin was around $1,100 and within a year the price rose to over $9,000 by February 2018.While on the same platform cryptocurrency Rippple has a price less than one dollar. There exist around 1500 Cryptocurrencies with different market caps and prices. Ethereum, Ripple, bitcoin, NEO, IOTA, Bitcoin and Bitcoin cash are popular ones. Not every cryptocurrency provide equal returns so before getting into this game can and everyone should clearly be well informed.

The income laws do not mention how cryptocurrency gains should be taxed. The government had raided Bitcoin exchanges and also issued a notice to people regarding the investment in cryptocurrencies and not mentioning the profits in income tax returns gains from cryptocurrencies investment. Though some experts consider that it could be either taxed as business income or as capital gains depending upon the holding period, but no existence of such laws in income tax department yet.