Alarm at 6 am. Wake up. Make coffee. Boot up the comp.

That’s the routine of Chandan Choudhury, 33, financial analyst and trader now full time cryptocurrency analyst and day trader. Day-in and day-out this is how Choudhury starts his day, which seldom ends until late night on most weekdays.

The day starts with the four screens on his home-office wall coming to life. Charts, news feeds, and cryptocurrency market prices. The peak of trading in the US is over, the Chinese and Japanese markets are up and about, and the Indian markets are about to get active.

Refresh, study, analyse and trade.

“The first thing I check is my portfolio and then I browse through the markets and check prices. Then usually it’s news, early fliers and other activities,” says Choudhury.

The Bengaluru resident got introduced to the world of cryptocurrencies early in 2017. By then, he was a professional trade and derivatives analyst having spent over five years in companies like Futures First and Fyers Investment Advisors for over 5 years before starting up on his own as an investment advisor.

Choudhury, after understanding how cryptocurrencies and blockchain work, made the switch to cryptocurrencies trading and began with a few initial coin offer (ICO) investments. ICOs are similar to IPOs, short for initial public offers, except what is on offer is cryptocurrency-based tokens and buyers of the tokens don’t have shareholder rights.

“Around April-May this year I got introduced to cryptocurrency and after researching a bit I decided to invest in a couple of ICOs like Humaniq and TaaS. They gave me around 6x to 8x growth,” says Choudhury.

Trading, not mining

Much of these returns came from the exploding world of cryptocurrencies in that period. Bitcoin, the most popular cryptocurrency in the world, rose 4 times in value between April 1 and August 31 to $4,565 each. The bull rally in Altcoins, as all non-Bitcoin cryptocurrencies are grouped under, was even more spectacular — they rose 11 times in the same period.

The volatility in cryptocurrencies in recent weeks has only excited the trader in him, says Choudhury. “With my experience I can read charts and am able to predict the market. I have used the market volatility to my advantage,” he says, but rues the fact that there are no professional grade charts and tools for the cryptocurrency market in india.

Choudhury is among the early band of day traders from India playing the cryptocurrency market. Unlike cryptocurrency mining, trading does not involve generating the coins which needs brute computing force. To that extent, trading is less capital-intensive and fortunes can swing depending on the timing of entry and exit in the market.

People in the cryptocurrency business says there are scores of investors making a beeline to day trading in cryptocurrencies.

“There has been a massive shift from stocks into cryptocurrency trading for the past 8 months, especially after demonetization. Not just Bitcoins but Ether, Dash, Z Cash, Monero,” says cryptocurrency expert Sunil Aggarwal. He is a director at Theory Frames Knowledge Networks and author of the recently released book ‘Bitcoin Magnet’.

Specialist traders are a new breed of enthusiasts flocking to the cryptocurrency boom in India. Until recently, traders on Indian cryptocurrency exchanges were mostly miners trying to sell coins that they have mined or other users who were looking at cryptocurrency as a mid term or long term investment. Just like equity day traders who have an affinity for penny stocks or low-priced shares, cryptocurrency traders, too, tend to trade in mid level currencies where the entry barriers are not too high for intra-day trading.

Arbitrages from deep India

Zakhil Suresh is not a newcomer to the cryptocurrency world. (FactorDaily readers will remember the resident of Kodungallur, a town in Kerala from this story we did on Amit Bhardwaj, the founder and CEO of GainBitcoin, which has been accused of scamming investors.)

Suresh has been dabbling in Bitcoin and Ether as a mining investment since 2015. But a shoulder injury this June marked his entry into crypto currency trading.

The injury ruled out physical activity and the computer beckoned. “I was holding a few Ether and wanted to see what I could do with them. I decided to short trade them and I was able to make money. This was around the boom time when Ether prices progressed from $200 to $400,” says Suresh.

That trading experience gave him the confidence to venture further into it. But soon after peaking at around $400, the price of Ether began to slide and this is when Suresh realised the volatility of the market can cut both ways. Still, he managed to make a tidy sum by arbitrage trades between prices on Indian and international cryptocurrency markets.

Choudhury, too, plays the arbitrage game. “I usually enter BTC from the Indian exchanges and the coin swap for altcoins. Most of my trading is done on international exchanges mainly Poloniex and Bittrex. Indian exchange prices are not in sync with international markets and transaction fees are also a problem,” he says. He currently manages the investment portfolios of his close family members and says he is able to make 60-70% profits every month.

He didn’t want the amounts he trades or the cryptocurrency portfolio size he manages to be disclosed. He is in the process of setting up a company to manage cryptocurrency portfolios for others.

Suresh also points to last month’s fork between Bitcoin and Bitcoin Cash as an example of the kind of jumps that cryptocurrency traders — or, for that matter, a trader in any financial asset class dreams of — dream of. “We entered the market on August 2, just a day after the fork, and in a span of two hours I was able to double my investment,” he says.

He operates an Ether trading brokerage service along with his friends, which handles over Rs 5 lakh worth of trades daily.

Cut to Amritsar. Kannav Aggarwal, 25, is a law student but trades in Bitcoins in his free time. “The Bitcoin market is very volatile and I realised that I could make money by buying and selling at the right time in the market. After I enter once the prices rises by Rs 15,000-20,000 I make my exit,” says he, adding he has laso invested in Dashcoins for the long term.

Indian financial rules are yet to spell out how gains from cryptocurrency trading or mining investments will be treated. This combined with the rally in Bitcoin and altcoins coupled with the recent volatility is attracting day traders such as Choudhury, Suresh and Aggarwal by the hordes. That is also one of the reasons various new bitcoin and altcoin exchanges have cropped up in India.

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