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Indian Crypto Investors, Grab the Opportunity with Bitcoin ETF Approval – Don’t Miss Out!

The recent nod from the United States Securities Exchange Commission (SEC) for spot Bitcoin ETFs (exchange-traded funds) has opened new doors for Indian investors keen on exploring the world of crypto assets. Let’s delve into the details and understand how Indian investors can seize this opportunity.

Embracing Bitcoin ETFs via the Liberalized Remittance Scheme (LRS)

Indian investors can now diversify their portfolios by participating in the crypto market through the Liberalized Remittance Scheme (LRS). This avenue not only offers investment options but also brings potential taxation benefits for savvy investors.

Navigate LRS Guidelines for Foreign Market Ventures

Participation in foreign stock and ETF markets by Indian investors is governed by the Reserve Bank of India’s LRS. Investors can allocate up to $250,000 for investments, including US ETFs, under this scheme. However, it’s crucial to note that remittances solely for trading purposes in foreign markets, including the US stock market, are strictly prohibited.

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Viram Shah’s Insights on Bitcoin ETFs

Viram Shah, CEO of Vested Finance, emphasizes that the Bitcoin ETF presents Indian investors with an opportunity to include crypto in their portfolios via the LRS route. With advantages like regulated exposure and minimal concerns about cryptocurrency storage, Bitcoin ETFs become an attractive investment option.

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Tax Dynamics and Bitcoin ETFs

Shah notes that the absence of actual crypto purchases exempts investors from the 1% TDS on transactions, and capital gains tax remains lower. However, the 20% TCS introduced in 2023, applicable on deposits above INR 7 Lakhs via LRS, poses liquidity challenges. Investors must also consider management fees associated with the ETF.

US SEC’s Approval and Institutional Investments

On January 10, the US regulatory body granted approval for 11 spot Bitcoin ETFs, attracting interest from financial giants like BlackRock, Vanguard, and Fidelity. Sidharth Sogani, CEO of Crebaco Global, anticipates a substantial inflow of around $5 billion through ETFs in the next 45 days, bringing stability to Bitcoin prices.

India’s Cryptocurrency Landscape Post-Budget 2022

The Indian cryptocurrency market underwent significant changes with the introduction of taxation regulations in the Union Budget 2022. The measures included a 30% income tax on profits and a 1% TDS on all cryptocurrency trades, reshaping the landscape for crypto enthusiasts in India.

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