- Youth in Kerala invest in crypto but risk being victims of crypto scams for lack of research.
- A recent major scam on WazirX resulted in Rs 2,000 crore in losses, underscoring the risks associated with inadequate regulation.
- Experts recommend limiting crypto investments to 2 percent of your portfolio to avoid falling victim to scams and suggest opting for safer investment options like stocks.
Most of the youth in Kerala are attracted to cryptocurrency, but there is a high risk of crypto scams. A 24 year old Bengaluru tech professional invests in stocks and mutual funds, but also invests in crypto, which he views as an updated alternative.
In Kochi, students prefer the low entry fee of crypto at Rs 100. But they tend to believe in coins sponsored by major brands like Elon Musk, and thus, may end up falling into a crypto scam without doing enough research.
Crypto Scam Risks in Volatile Markets
The risk of scam increases with market volatility. Recent changes in tariffs made Bitcoin fall 4.8 percent and Ripple 8.9 percent, illustrating how volatile crypto can be.
Young investors, however, perceive crypto as distinct from other investments such as real estate or stocks.
Vikram Subburaj, CEO of Giottus, explains that young Indians perceive crypto as a rival to traditional types of investments, but a scam can destroy savings overnight.
Need for Investor Caution
Crypto scams have struck India hard where crypto is legal to trade but not for regular use. One such important crypto scam on WazirX caused losses of Rs 2,000 crore to individuals such as Abin Jose Tom, who lost Rs 1.8 crore.
According to Edul Patel of Mudrex, 8 percent of their clients are from Kerala, predominantly youth and IT literate. But without tough rules, crypto scams continue to pose a significant threat to these investors.
Experts warn about these scams and recommend caution. Financial advisor Nikhil Gopalakrishnan suggests that stocks and mutual funds are safer in the long run due to better regulations. He recommends keeping crypto to 2 percent of investment to prevent a crypto scam.
While India is in the process of framing tax regulations and international crypto policies, young investors need to remain vigilant to not lose money to a crypto scam.
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