The acceptance and use of virtual currency or cryptocurrency to transact business has grown significantly in the past decade. With the onset of a global pandemic, lockdowns, and business closures followed by unprecedented debts taken on by governments to deal with the resulting economic fallout, interest in cryptocurrencies is escalating. There are now millions of people out of work and many searching for new ways to increase income. The most traded cryptocurrency in India by far is Bitcoin – and the value of Bitcoin soared in 2020, ending the year at its highest price ever.
In this guide, we walk through several options for earning and trading Bitcoin available to residents of India. For more information, see our ultimate guide to earning Bitcoin across the world.
Is Earning Bitcoin Legal in India?
In 2018, the Reserve Bank of India (RBI) released a decision to prohibit any financial dealings in virtual currencies (VC’s). The scope of the services affected by the decision was broad and included all trading, lending, buying or selling of VCs. In short, the decision required all Indian banks to cut ties with any entities that dealt in VCs. The RBI cited consumer protection as the reason for imposing the ban.
Following this decision the country’s virtual currency exchange operations were crippled. Many were forced to shut operations down inside the country. Others were forced to relocate their operations to outside of the country or to shift to a crypto-to-crypto exchange model for their business.
Although users in India only accounted for about 3% of the total global cryptocurrency market at the time of the ban, the growing interest and forecasted increase in activity in the country prompted several exchanges to challenge the ban in the Supreme Court of India. These exchanges were represented by the Internet and Mobile Association of India (IAMAI). The IAMAI argued that the ban infringed on the rights of virtual currency users that wanted to buy and sell cryptocurrency as part of their profession or occupation as contained in the Indian Constitution.
In March of 2020 the court finally accepted that the ban was a restriction of protected rights. The court found that the decision didn’t take less intrusive measures such as prohibiting only anonymous cryptocurrencies into consideration. The court also agreed that there hadn’t been any visible damage to banks regulated by the RBI and that a complete ban on trading was not proportionate. Based on the court’s decision, earning Bitcoin in India is legal.
Is Bitcoin Profitable in India?
Ashish Singhai, chief executive of CoinSwitch exchange, commented that the release of the ban “is the first step towards embracing cryptocurrency in India, which has the potential of becoming one of the largest crypto markets.”
Since the ban was lifted, users have spent millions daily in cryptocurrency trading. The country’s largest crypto exchange, WazirX, reported a 125% increase in new users and registrations in the first six months of 2020. And, CoinDCX is another national exchange platform reporting 85% growth in traders in the last quarter alone.
Publicly listed companies such as Microstrategy and Square are also now investing in Bitcoin and allowing merchants to use cryptocurrency on their platforms. The acceptance and expanded use of cryptocurrency by organizations like these and by financial services companies like Visa and Mastercard is increasing consumer confidence and sense of credibility in Bitcoin.
After the RBI’s decision was reversed it became legal once again to buy and sell Bitcoins in India. Between March and August 2020 alone (shortly after the reversal in March), the return on investment on Bitcoin in India shot up 101%, as it did all across the world.
With both consumer and corporate interest in Bitcoin surging globally in 2020 and in to 2021, Bitcoin is well-poised to be a profitable investment opportunity. That said, it is not without risk, and we are not offering investment advice.
Can I Earn Money from Bitcoin?
A question many of us consider is how we might be able to increase our income. This is especially true with the instability of the current economic climate. There are many ways you can increase your earnings with Bitcoin. These include buying and selling Bitcoins, Bitcoin lending, Bitcoin mining, and marketing affiliate programs.
Bitcoin Trading
Bitcoin trading is a common way to earn money from Bitcoin – however, it comes with many risks and is by no means foolproof! Trading consists of following the old adage, “buy low, sell high”. To get started with making money through trading, you’ll need to buy Bitcoin through an exchange or online marketplace. There are many popular Bitcoin exchanges including:
The overturning of the RBI restrictions could not have occurred at a better time as it coincided with the start of the pandemic and the nationwide lockdown in India. This was an ideal time to start earning through Bitcoin trading or just simply buying and holding Bitcoin. Thousands of new investors registered with crypto exchanges across India. As the global economy shifted and the value of petroleum and other investments dropped with the pandemic, the value of Bitcoin grew. When the value of gold grew 30% in 2020, the value of Bitcoin grew 160% during the same period of time.
Another spike in the purchase and trading of Bitcoins occurred during the Diwali season. In 2020, some patrons substituted gifts of precious metals (gold and silver) with Bitcoin, Ethereum and other cryptocurrencies on Dhanteras. And, just as the Muhurat trading activity on the Indian stock market offers the free opportunity for Indians to trade to bring wealth and prosperity throughout the new year, some cryptocurrency exchanges like CoinDCX offered customers free trading on Dhanteras in 2020.
Trading can become a full time job, but there is significant risk. To succeed requires research and a lot of speculation on price movements. In order to achieve long term capital gain, traders must have the ability to both sense the direction the price will go and have the risk management skills to start and end trades successfully.
You can find out more about how to buy and sell Bitcoins by visiting the website of one or more of the above listed exchanges.
Earning Bitcoin Through Lending Platforms
Just as you can earn interest on fiat money (an INR bank account) you can earn interest on any Bitcoin you’re accumulating by opening an interest-earning Bitcoin savings account.
Lending platforms that take Bitcoin deposits operate in a very similar way as traditional banks. Bitcoin lending platforms provide a means for lenders to deposit sums of Bitcoin currency which the platform in turn provides to borrowers in the form of loans. The individuals taking out the loans then pay interest on the loan amount. If you’ve accumulated a significant amount of Bitcoin, there’s opportunity for you to engage with a Bitcoin lending platform to earn interest on your Bitcoin. If you’re considering opening a Bitcoin account, some international lending companies to consider are:
Another option is Bitbns, a trading platform that also permits the lending of crypto funds at a fixed interest rate for a specific period of time to other users.
For security purposes, it’s important to look for and review the specific disclosures and disclaimers provided by any trading or lending company. You should easily find links to these by searching for the ‘All Rights Reserved’ reference on their website as this information is usually placed in this same general location.
Earning Bitcoin Through Bitcoin Mining
Cryptocurrencies such as Bitcoin rely on a field of complex mathematics and computer science called cryptography to verify the transfer of assets and control the creation of additional currency units. The process in Bitcoin’s case has come to be known as ‘mining’ – and if you have access to cheap electricity, it is one way you can earn some extra income with cryptocurrencies.
Bitcoin miners run specialized computers that use a lot of electricity in order to solve puzzles of sorts on the Bitcoin network. Why would a Bitcoin miner go through all this trouble? Well, Bitcoin miners earn Bitcoin rewards and transaction fees for solving these puzzles. That’s where earning Bitcoin comes in.
It’s virtually impossible to make a profit by mining using a typical home computer, though. The high difficulty level of mining today requires it to be performed using purpose-built application-specific integrated circuit (ASIC) devices using very low-cost electricity. Mining with a typical home computer paying residential electricity rates will not be a profitable venture. However, if you have access to free or cheap power and are handy with computers, this could be a nice way to earn Bitcoin.
If you have connections to India’s growing renewable energy market, Bitcoin mining could be a good way to utilize stranded energy assets or make money off energy generated in off-peak hours. Additionally, farmers and homeowners may be able to take advantage of the recent residential solar scheme approved by the Cabinet Committee on Economic Affairs (CCEA), where the government will pay for 40% of the cost of rooftop solar systems.
Bitcoin Affiliate Marketing
Many companies offer affiliate marketing programs where they pay people for referring others to their products. For people that have their own website or are considered an ‘influencer’ on social platforms such as YouTube, Twitter, etc., they can earn additional income by successfully promoting another company’s products or services. If you’re considering affiliate marketing or already working in this field, there are programs that exist that pay out in Bitcoin. Some of the most common Bitcoin-based affiliate programs include:
- Online retail stores (those that accept crypto payments)
- Crypto casinos and gambling websites
- Cryptocurrency exchanges and digital wallet account services
To earn Bitcoin with a marketing affiliate program like these, search for an affiliate network or referral program you want to join (companies such as CoinSwitch, Coinbase, Ledger Wallet or Trezor Wallet) and locate the registration information on the company’s website. They’ll provide you with the referral links you need to get paid for marketing their offerings. As with marketing programs that pay out in fiat currencies, you’ll be paid based on the success of your marketing efforts (usually a % of sales) resulting from your work.
Earning Bitcoin Through Work / Job Opportunities
An increasing number of companies are offering to pay employees in Bitcoin, including prominent Bitcoin exchanges like Kraken. Some freelance work opportunities may pay out in Bitcoin, although major platforms like Upwork and Fiverr do not support Bitcoin payments at this time. However, thanks to Bitcoin companies like Bitwage, you no longer have to ask your employer to pay you in Bitcoin – you can set it up yourself. Through Bitwage’s free program, you can receive your salary in Bitcoin, no matter who you work for.
Bitcoin Reward Shopping Programs
We’re flooded with advertisements for cash back customer loyalty and reward programs offered by credit card companies, restaurants, and retailers. These programs offer us discounts in the form of credit to our account which is usually a percentage of the sales value. Thankfully, Bitcoin rewards have not been excluded from this cash back rave.
With a Bitcoin rewards program, your earnings are accumulated in a digital wallet account and available for you to spend on future purchases or transfer to another wallet. This is the same basic concept as other cash back programs, but you earn Bitcoin instead of fiat currency like INR.
This is one of the easier ways to begin earning Bitcoin without cost as there is no investment on your part required to join these programs. In most cases, you only need to download an app to your phone and then link the credit or debit cards you want to use to make purchases. With the increasing number and popularity of these programs, the number and variety of new retailers starting to participate is also increasing. Retailers are being driven to offer more and better deals and discounts on apps like these to remain competitive.
It’s also important to note that if you use a credit card to make purchases, any Bitcoin cash rewards earned are in addition to cash back you may already be earning on your credit card. And, when you make the purchase using a credit card, if something goes wrong (i.e., you want to dispute the charge), the process your credit card company has established to manage disputes is still valid. Many of these apps, like Lolli, are only available to US customers now – but are looking to expand internationally.
Some apps will allow you to use either credit cards or Bitcoin you’ve earned to shop for gift cards. Examples of these apps are the Bitrefill app or the Bidali app. You can shop using Bitcoin and also receive Bitcoin cash back on purchases with these programs. You can purchase gift cards from popular retailers such as Flipkart, Amazon, Starbucks, Uber and many more. You’ll receive a minimum of 1% cash or Bitcoin back on each purchase.
Earning Bitcoin in India
As the hardest-to-produce type of money on Earth, Bitcoin does not come for free. However, as more and more market participants recognize the value in Bitcoin’s digital network, the opportunities to earn Bitcoin are growing quickly. By using a tool like Bitwage, Indians can access Bitcoin easily as a means of payment for jobs they complete.
Given the constant debasement of fiat currencies conducted by central banks, which destroys the savings of hardworking people around the globe, Bitcoin shows promise as a potential place to store wealth – just as previous generations used gold to achieve the same thing.
Of course, you can also purchase Bitcoin with your rupees – see below for our guide to buying Bitcoin cheaply.
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