New Delhi: The cryptocurrency market is witnessing ups and downs since the announcement of a 30% tax on the transfer of any virtual assets by Finance Minister Nirmala Sitharaman. The announcement by Sitharaman was made during the budget session on February 1.
In the latest development, Crypto exchange CoinSwitch on Monday launched a recurring buy plan (RBP), which is a systematic investment plan (SIP) to buy crypto assets in India.
With the launch, the startup aims to reduce the volatility in the market. The idea will also help to stop impulsive buying or selling decisions.
The plan will be more beneficial for those who invest in a more systematic manner and expect profit on a long-term basis, according to Ashish Singhal the founder and CEO of CoinSwitch.
On the budget, Singhal said, ”Our initial understanding is that the 1% TDS will usually impact frequent traders who operate on smaller margins.”
Why SIP needed?
Investment under Systematic Investment Plan (SIP) is a very famous term in Mutual Funds. It allows anyone to invest a fixed amount in your preferred Mutual Fund scheme. The amount deducted from your account is then invested in the Mutual Fund of your choice. One may lose money as the investment is based on market risk.
Basically, CoinSwitch is trying to do something like Mutual Fund. However, it is yet to be seen how the company’s plan works in the field of cryptocurrency.
How volatility affect the market?
Volatility is a common thing in the market. However, higher volatility triggers the emotions and behaviors of investors who invest considering the long-term profit. Market researchers also say higher volatility corresponds to a higher probability of a declining market. On the other hand, lower volatility is connected to a higher probability of a rising market.
