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When I first started exploring investing in crypto, I embarked on my journey using exchanges. Here are the steps involved in purchasing your cryptocurrency of choice:
Sign up on the platform
Submit KYC documents
Add bank account details
Provide the application bank details that will be used for adding INR to the platform to buy crypto.
And finally, gain the ability to purchase any cryptocurrency that you wish.
All this works well, but at the end of the day, do you really own your crypto? You just have an entry in a database. There's a saying: Not your keys, Not your Crypto! But what does that really mean?
When you invest on exchanges like CoinDCX or Mudrex, you don’t truly control your crypto. The private key that is used to transact on the blockchain is stored by the exchange, which means the control of assets is centralized. This is why they’re referred to as centralized exchanges, or CEXes.
The primary purpose of this method is to speculate on the prices of cryptocurrency tokens. While speculation can be valid, I believe cryptocurrency and blockchain should be focused on creating real-life value, moving beyond just market speculation.
Much attention has been given to hacks of exchanges (like ByBit in 2025) or those that don't have the best intentions for their users' funds (FTX in 2022). Utilizing self-custody is a vital approach to securing your cryptocurrency.
If you are wondering where to store crypto assets instead of exchanges, there are several options available.
Hot wallets: Services like MetaMask and Trust Wallet are well-known multi-platform wallets that offer ease of use.
Cold Hardware wallets such as Ledger and Tangem. I personally use Tangem and can vouch for its simplicity and user-friendliness.
These options provide self-custody but vary in how private keys are stored. If the keys are stored on a device connected to the internet, it is termed a hot wallet. Conversely, if the keys are kept on a device that's not internet-connected, it is a cold wallet. Hot wallets are easy to use, but they are less secure since the keys are online and could be compromised. Cold wallets require a bit more investment and additional steps, but they offer far better security against bad actors.
There are several challenges pertaining to self-custody of crypto assets in India:
Many exchanges do not allow withdrawals to personal wallets, including platforms like CoinDCX and CoinSwitch.
Some platforms permit withdrawals only after completing level 2 KYC, which requires excessive documentation such as ITR for the last three years, PAN Card, Aadhar Card, and proof of residence and employment. Examples include Unocoin, Mudrex, and Flitpay.
International exchanges, like Binance, often lack an INR on-ramp but still operate in India.
Peer-to-peer exchanges: Binance’s P2P platform allows transactions directly between customers and merchants.
Let me share my experiences with various platforms and what I recommend to anyone getting started.
Regarding exchanges like CoinDCX, their user experience is one of the best for Indian users—the app is simple and intuitive. However, they don’t allow for self-custody of funds, meaning you have an IOU with these exchanges, essentially speculating on prices.
Reasons not to use it: Lack of self-custody options.
Unocoin and Mudrex allow withdrawals, but I've found the required documentation overwhelming. The withdrawal fees are high; for example, Mudrex charges a 2% fee, which can be more expensive than blockchain transactions. Unocoin's user experience is particularly poor, with app issues and a disappointing web interface.
Reasons not to use it: Self-custody is possible, but it comes at a steep price.
Binance does provide a superior user experience; however, it lacks an INR on-ramp, which means purchasing assets directly with INR is impossible. You need existing cryptocurrencies to transact on Binance. The UI is better than most Indian exchanges but might be complex for beginners. Thankfully, their lite mode simplifies the process.
Reasons not to use it: No INR on-ramp.
Binance's P2P service allows transactions between Indians for exchanging crypto, but I find this option unfeasible for two main reasons:
P2P scams and potential bank freezes: Many cases have emerged where fraudulent transfers lead to bank account freezes.
The cost of USD on the P2P platform was around 98-100 INR when the market rate was about 85 INR.
In search of a straightforward SIP strategy into crypto that is easy, incurs lower charges, and offers self-custody, I discovered P2P.me during the India Blockchain Week. They are a decentralized peer-to-peer marketplace that offers an on-ramp with UPI, allowing you to acquire USDC on the Base chain (an Ethereum L2). Funded by Coinbase Ventures and MultiCoin Capital, their platform offers some clear advantages:
On the buy side: There’s minimal risk when processing purchases, as funds move from me directly to the other party. Moreover, they provide the best price for USDC across any platform.
On the sell side: While I haven’t yet used this platform for selling crypto, I feel comfortable doing so when the need arises. Funds can be sent to a merchant who can transfer the money to a bank account, minimizing the risk of freezing.
Now that I’ve established a routine for investing, a critical question arises: How much of my savings should I invest? I’ve decided on allocating 10% of my portfolio to crypto, 70% to equities, and 20% to short-term debt holdings. Although 10% feels substantial, I’m comfortable with this arrangement due to my long-term investment strategy. I recommend that newcomers consider starting with a 1-2% allocation to their overall net worth, monitoring their performance over time. Maintain your investment allocation monthly, and after every six months or annually, reevaluate your inflows/outflows according to your asset allocation preferences.
I believe cryptocurrencies will play a crucial role in our future, and there are compelling reasons to do your research and maintain a portfolio allocation that feels comfortable. The best approach isn’t through centralized exchanges but by self-custodying crypto assets, allowing you true ownership by controlling your keys.
Pritam Gembali
