After dabbling in traditional investment avenues like stocks, fixed deposits, gold, mutual funds and real estate, some investors are venturing into more adventurous territory—digital currency, crowdfunding and P2P funding—to make their wealth grow. 

While the returns have been satisfactory in many cases, others have lost money too. We look at the pros and cons of some alternative investing avenues. 

Bit by bit 

There are a little over 15 million bitcoins in circulation today and no more than 21 million will be mined ever, making the virtual currency attractive to investors. The rising demand for and lack of supply of have pushed up the price of bitcoins from $16 per coin in 2013 to $1,700 today. 



Sensing the potential of bitcoins as an investment, Bengaluru-based Ashrith Govind, 23, started investing Rs 5,000 a month in the cryptocurrency three years ago. Encouraged by the returns—30,000/- per month.

However, an investor in bitcoins has to be ready to face extreme volatility. In 2015, Govind lost Rs 1.5 lakh when price of bitcoins dropped significantly. One bad trading day can mean a loss of Rs 12,000 for him. 

Sathvik Vishwanath, CEO and Co-Founder of online platform Unocoin says, “There is a financial risk in investing in bitcoins. Like in equity markets, investors tend to buy when prices are up and sell at lows. Then there is a technology risk too which can render bitcoins virtually worthless in future.” 



More importantly, the legality of bitcoins is in question in India. Warning against the use of bitcoins, Minister of State for Finance Arjun Ram Meghwal stated in Parliament that, “The absence of counter parties in usage of virtual currencies including bitcoins, for illicit and illegal activities in anonymous/pseudonymous systems could subject users to unintentional breaches of anti-money laundering and combating financing of terrorism laws”. 



Financial advisers feel bitcoins as an asset class should ideally be avoided. Shree Parthasarathy, Partner, Deloitte Touche Tohmatsu India warns, “The money invested in bitcoins, if at all, should form an insignificant part of your portfolio and you should be able to afford to lose all that money.” 

Lend and earn 

P2P platforms have brought lenders and borrowers closer. Technology allows easy credit to borrowers, while lenders earn high returns on idle funds. Chennai-based Jose Joseph, 45, has been lending on P2P platforms since 2015. On the Rs 1 lakh he has put in so far, he has earned an average return of 20%. However, before lending you should study the borrower’s profile carefully to compute the risks before making a lending decision. Rajat Gandhi, CEO and Founder of P2P lending firm, Faircent, says, “Most P2P platforms provide details about borrowers. They are classified across risk buckets from low to very high and selection should depend on your expectations.” 

The biggest risk is that of defaults and P2P platforms not helping in collections. So, before you lend money ask about the platform’s collection assistance policy. 



Going with the crowd 

Crowdfunding has also found favour among those looking to invest in the startup space. Gurgaon-based Sandeep Aggarwal has invested in nine startups till now this way. Aggarwal says, “I make it a point to understand the market and longevity of products and services the company is going to offer. I prefer to interact with the founders and core management team for better insights.” 



This mode of investing works best for those with a long time horizon of at least 5 years as probability  .. 

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