Crypto vs. SIPs: Why 99% of Indians Should Never Touch Bitcoin

The Lure of Bitcoin vs. The Stability of SIPs

It was early 2021 when my cousin Rajesh called me, his voice brimming with excitement. "Bro, I just doubled my money in Bitcoin in three months! You NEED to invest now!" He was convinced crypto was the future—after all, Elon Musk was tweeting about it, and every second finance influencer on YouTube was shouting about massive returns.

Fast forward to 2022: Rajesh had lost over 60% of his portfolio in the crypto crash. He had taken loans to invest more at the peak, thinking Bitcoin would never go down. Today, he avoids talking about investments entirely.

This is the typical cycle: The hype, the FOMO, the reckless investment, the crash, and then silence.

If you're an Indian retail investor with dreams of financial freedom, should you invest in Bitcoin?

The honest answer: 99% of Indians should never touch it. And here’s why.

1. The Myth of High Returns in Crypto

Yes, Bitcoin has made some people rich. But for every success story, there are thousands of silent losses. The reality is:

• 90% of Bitcoin traders lose money over time (source: multiple studies on trading behaviors).

• The biggest winners are often early investors or those who bought at dirt-cheap prices and held for a decade.

• Most retail investors buy at the peak due to hype and panic-sell at the bottom, locking in massive losses.

SIPs (Systematic Investment Plans) in equity mutual funds, on the other hand, have consistently delivered 12-15% CAGR over decades. More importantly, they create wealth without the emotional rollercoaster of crypto crashes.

2. Volatility: Can You Really Handle It?

Let’s take two scenarios:

• Stock Market (SIP in Index Funds): A 10% fall in a year is considered bad. A 20% fall is called a "crash."

• Bitcoin: It fell from $69,000 to $16,000 in a year—a nearly 75% drop.

Imagine putting ₹5 lakh into an investment and seeing it shrink to ₹1.25 lakh in months. Most Indian investors don’t have the stomach for that kind of loss.

When your money in an SIP drops, you can still stay calm because it’s backed by companies with real earnings. But when crypto crashes, there's no underlying value to protect you—it’s just numbers on a screen.

3. Lack of Regulation & the ‘Rug Pull’ Problem

The Indian government and RBI have made their stance clear: Crypto is not legal tender, and it carries extreme risks. The taxation rules (30% tax on gains, 1% TDS on transactions) are designed to discourage speculative trading.

But worse than taxes is the lack of investor protection. Crypto exchanges have collapsed overnight (FTX, anyone?), billions have been lost, and scams are rampant. Unlike mutual funds, which are regulated by SEBI, in crypto, if you lose money due to fraud, no one is coming to save you.

SIPs, on the other hand, are highly regulated and protected by Indian financial laws. Your investments are backed by real companies and economies—not internet hype.

4. The Get-Rich-Quick Mindset = Guaranteed Disaster

Most Indians investing in crypto aren’t doing it for technology or decentralization. They’re doing it because they believe it’s an easy way to get rich fast.

But here’s an uncomfortable truth: The get-rich-quick mindset is the fastest way to lose money.

Warren Buffett didn’t get rich overnight. Rakesh Jhunjhunwala didn’t make billions gambling on random trends. They built wealth through disciplined, long-term investing in real businesses.

Crypto encourages impulsive, reckless investing. SIPs teach discipline, patience, and steady compounding—principles that actually create wealth.

5. SIPs: The Most Boring Yet Most Powerful Wealth Creator

Let’s compare two investors:

• Amit invests ₹5,000 per month in Bitcoin: He sees wild ups and downs, faces sleepless nights, and ends up panic-selling half his portfolio in a crash.

• Priya invests ₹5,000 per month in an Index Fund SIP: Over 20 years, her investment compounds at 12% CAGR, making her over ₹50 lakh with minimal stress.

Who do you think is more financially secure in the end?

SIPs work because they remove emotions, ensure consistency, and leverage the most powerful force in investing—compounding.

Conclusion: If You Must Invest in Crypto, Follow These Rules

If, despite all this, you still want to invest in Bitcoin, here’s the safest way:

1. Limit it to 5% of your portfolio – Treat it as a speculative bet, not a primary investment.

2. Never take loans or use emergency funds – Crypto is too risky for that.

3. Stick to Bitcoin & Ethereum – Avoid meme coins and scams.

4. Use Indian-regulated exchanges – Don’t keep funds on offshore exchanges.

5. Be mentally ready to lose it all – Only invest money you can afford to see go to zero.

But for 99% of Indians, the clear path to wealth isn’t through Bitcoin—it’s through steady, disciplined, and proven investment methods like SIPs.

So the next time someone asks, "Should I invest in Bitcoin?" tell them this:

Invest in Bitcoin only if you’re comfortable losing everything.

Invest in SIPs if you want to build real, sustainable wealth.

Your financial freedom isn’t a someday goal—it’s a today decision.

FYI: This is simply an illustration and not investment advice. Invest responsibly.