For the blue-collared and white-collared, crypto holds the promise of heavy returns. But for entrepreneurs who already have their hats in the profit-and-loss ring with tall investments to their names, the volatility gives both the push and pull. Three entrepreneurs share their strategies, tips, and tricks to enjoy an unscathed run.
Most of the entrepreneurs’ brush with crypto is planned. Some walk into the volatile world of investment by accident. Dhruvil Sanghvi, founder and CEO of LogiNext, a global technology and automation company, received a coupon to redeem in Bitcoin when he was a research student at Carnegie Mellon University, U.S. Slowly he then expanded his portfolio to include Ethereum (ETH). “I am glad I held on to it and built on it over time,” says Dhruvil who has had a close to 200% portfolio growth so far and admits to making crazy and ambitious bets at times.
Satish Vijayan, founder of Nexdha Fintech Ltd, Chennai, likes to smart-play to float through the high-risk trading waters. In fact, except the six freshers, all of Nexdha’s employees are crypto investors. “Typically, 5-10% of your portfolio can be in crypto. As a speculator, you should play with around 2%,” he shares his strategy. XRP, Graph, Hadera, Matic, Augur, XLM, Sol, and Ada feature in Vijayan’s exhaustive portfolio. In the last one year, he has had a more or less break-even run.
Sharmin Ali, founder at Instoried, a content optimisation platform, who dabbled in Ethereum from a year back, claims to be in a notional loss, currently. On the crypto’s lure, she states how the reverse of the proverbial-ideal stance works for her. “It is about making money work for you instead of the other way round,” Sharmin tells us.
In general, since there is a lot of noise around the newly-emerging currency ranging from social media sensations, discord channels and a lot of pump-and-dump forums that build the hype only to let it bust, it is important to filter through the clutter for landing the right leads. From YouTube influencer advices to white paper reading to blatantly plugging into the fear and greed index, the info pick-up platforms these entrepreneurs use are vast and varied.
When he is ready to invest, “I look for the utility of the token along with a strong business case and team,” says Vijayan. Skepticism that strings along with the market simply heightens the buzz. To Sanghvi, the intrigue lies in the logic that the digital currency is going to follow the global wave of digitisation. “The fact that it is trying to change something very core to how the world functions and also the way it adds on to the history of money and its evolution keeps me enthralled.”
A better monitoring and tax regulatory framework and environment, decentralisation and the lift of the ban on its legal tender in India could see much more gushing activity. As entrepreneurs, even though volatility has been an inevitable part of their work lives, recognising the cycles of volatility and the quality of business underlying the currency are the great motivators for a majority of them. Rather than trading, investing in blockchain is another safe way these entrepreneurs choose to dabble in crypto. “My strategy is to buy the dips and hold; higher risk translates into higher returns,” says Sharmin.
But changing regulations curbs the investors’ willingness quite often. Especially the lack of easy UPI options for traders has locked them in a telltale stall, suppressing the market right now. Apprehension loomed around transactions too. Most of these entrepreneurs go for international e-wallets such as Ledger Nano X cold wallet and Exodus that are anonymous, secure, hassle-free and work for multiple currencies and across multiple platforms. NPCI's recent disclaimer of its association to Coinbase investors has put a brake on payments and exchanges and high hopes are building around India's launch of its own digital currency in about a year. The bullish mood for future rides on this hope as Sharmin clarifies her stand saying, “I will opt for short and medium volatility.”
But before the much-awaited boom, Vijayan is sure that the market will explode and only the fittest 500-600 out of the 10,000 currencies will survive the explosion. He expects, “inter-operability is the biggest hurdle to be overcome. When it does, crypto will rule the world.”
“In a way, regulations defeat the purpose of cryptocurrencies (deregulated currencies),” says Sanghvi, disagreeing with the majority view. Nevertheless, he adds, “The possibility of a middle ground will likely clear the roadblocks, stabilise and support growth, eventually leading to mainstreaming crypto. It is after all a game of supply and demand with a long term vision,” Sanghvi hints the way ahead.