{"id":12178,"date":"2026-05-22T13:38:20","date_gmt":"2026-05-22T13:38:20","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/bitcoin\/"},"modified":"2026-05-22T13:38:20","modified_gmt":"2026-05-22T13:38:20","slug":"bitcoin","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/bitcoin\/","title":{"rendered":"Bitcoin"},"content":{"rendered":"<p><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/bitcoin\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Bitcoin<\/a> is the world&rsquo;s first decentralised digital currency, launched in 2009 by an anonymous developer (or group) using the pseudonym Satoshi Nakamoto. It runs on a peer-to-peer blockchain network, allowing transactions without banks or intermediaries. For Indian investors, Bitcoin is treated as a virtual digital asset (VDA) for <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tax\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>tax<\/a> purposes and is held by millions through registered exchanges.<\/p>\n<div><strong>Key takeaways:<\/strong>\n<ul>\n<li>Bitcoin is a decentralised digital currency on a public blockchain.<\/li>\n<li>Maximum supply capped at 21 million coins.<\/li>\n<li>Indian gains from Bitcoin are taxed at 30% under VDA rules.<\/li>\n<li>1% <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tds\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>TDS<\/a> applies on Indian exchange transactions over thresholds.<\/li>\n<li>Highly volatile; not suitable for risk-averse investors.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"how-bitcoin-works\">How Bitcoin works<\/h2>\n<p>Bitcoin transactions are recorded on a public ledger called the blockchain. New bitcoins enter circulation through a process called mining &#x2014; computers race to solve cryptographic puzzles, and the winner adds the next block to the chain. Anyone with the right software can verify transactions; no central authority is required.<\/p>\n<h2 id=\"supply-and-scarcity\">Supply and scarcity<\/h2>\n<p>The Bitcoin protocol caps total supply at 21 million coins. Mining rewards are halved roughly every four years in events called &#x201C;halvings&#x201D;, slowing new issuance. By 2025, more than 19 million coins have already been mined. This scarcity is often cited as a key reason for Bitcoin&#x2019;s store-of-value narrative.<\/p>\n<h2 id=\"indian-regulatory-and-tax-position\">Indian regulatory and tax position<\/h2>\n<table>\n<tr>\n<th>Aspect<\/th>\n<th>Current treatment<\/th>\n<\/tr>\n<tr>\n<td>Legal status<\/td>\n<td>Not legal tender but not banned<\/td>\n<\/tr>\n<tr>\n<td><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/income-tax\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Income tax<\/a> on gains<\/td>\n<td>30% flat under VDA rules<\/td>\n<\/tr>\n<tr>\n<td>TDS on transfers<\/td>\n<td>1% (on Indian exchange trades above thresholds)<\/td>\n<\/tr>\n<tr>\n<td>Set-off of losses<\/td>\n<td>Not allowed against any other income<\/td>\n<\/tr>\n<tr>\n<td>Carry forward<\/td>\n<td>Crypto losses cannot be carried forward<\/td>\n<\/tr>\n<\/table>\n<h2 id=\"how-to-buy-bitcoin-in-india\">How to buy Bitcoin in India<\/h2>\n<ol>\n<li>Choose a <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/sebi\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>SEBI<\/a>-aware Indian exchange that complies with VDA regulations.<\/li>\n<li>Complete KYC with PAN, Aadhaar and bank verification.<\/li>\n<li>Fund the account via <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/upi\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>UPI<\/a> or bank transfer.<\/li>\n<li>Place a market or <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/limit-order\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">limit order<\/a> to buy Bitcoin.<\/li>\n<li>Store coins in the exchange wallet or in a personal hardware\/software wallet for higher security.<\/li>\n<\/ol>\n<h2 id=\"volatility-and-risk\"><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/volatility\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Volatility<\/a> and risk<\/h2>\n<ul>\n<li>Bitcoin can move 5&#x2013;15% in a single day on news or macro events.<\/li>\n<li>Tax rules in India are stringent &#x2014; losses cannot offset other income.<\/li>\n<li>Custody risk: exchange hacks or operational failures can wipe out balances.<\/li>\n<li>Regulatory uncertainty in India remains a key risk.<\/li>\n<\/ul>\n<h2 id=\"bitcoin-in-a-portfolio\">Bitcoin in a <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/portfolio\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">portfolio<\/a><\/h2>\n<p>Many global investors treat Bitcoin as a non-correlated asset and hold a small allocation (1&#x2013;5%) for <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/diversification\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">diversification<\/a>. Indian investors should weigh the harsh tax treatment and high volatility before allocating. Never invest borrowed money in crypto. Use cold-storage wallets for long-term holdings; keep only a small balance on exchanges for <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/trading\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">trading<\/a>.<\/p>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<div>\n<h3 id=\"is-bitcoin-legal-in-india\">Is Bitcoin legal in India?<\/h3>\n<p>Owning and trading Bitcoin is not illegal. It is taxed as a Virtual Digital Asset at 30% on gains.<\/p>\n<h3 id=\"how-is-bitcoin-different-from-other-cryptocurrencies\">How is Bitcoin different from other cryptocurrencies?<\/h3>\n<p>Bitcoin was first and remains the largest by market capitalisation. Others (<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/ethereum\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Ethereum<\/a>, Solana, etc.) have different technical features and use-cases.<\/p>\n<h3 id=\"can-i-lose-all-my-money-in-bitcoin\">Can I lose all my money in Bitcoin?<\/h3>\n<p>Yes &#x2014; Bitcoin has experienced 50%+ drawdowns historically. Invest only what you can afford to lose.<\/p>\n<h3 id=\"does-lemonn-offer-bitcoin\">Does Lemonn offer Bitcoin?<\/h3>\n<p>Lemonn focuses on Indian equities, F&amp;O and <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/mutual-fund\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">mutual fund<\/a>s; for <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/cryptocurrency\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">cryptocurrency<\/a>, you would use a lice<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nse\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>nse<\/a>d <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/crypto-exchange\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">crypto exchange<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin is the world&#x2019;s first decentralised digital currency, launched in 2009 by an anonymous developer (or group) using the pseudonym Satoshi Nakamoto. It runs on a peer-to-peer blockchain network, allowing transactions without banks or intermediaries. For Indian investors, Bitcoin is treated as a virtual digital asset (VDA) for tax purposes and is held by millions [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-12178","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"Bitcoin is the world&#x2019;s first decentralised digital currency, launched in 2009 by an anonymous developer (or group) using the pseudonym Satoshi Nakamoto. It runs on a peer-to-peer blockchain network, allowing transactions without banks or intermediaries. For Indian investors, Bitcoin is treated as a virtual digital asset (VDA) for tax purposes and is held by millions&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12178\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=12178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}