How to Buy Bitcoin in Zerodha: Step-by-Step Guide & Alternatives (2023)

Introduction: Can You Actually Buy Bitcoin on Zerodha?

As India’s largest stockbroker with over 10 million users, Zerodha is many investors’ go-to platform for trading stocks and mutual funds. But if you’re searching for “how to buy Bitcoin in Zerodha,” there’s a critical reality check: Zerodha does NOT support direct Bitcoin or cryptocurrency purchases. The platform exclusively deals with SEBI-regulated assets like equities, derivatives, and mutual funds. Bitcoin falls outside this regulatory scope. This guide explains why direct crypto trading isn’t available on Zerodha and reveals practical alternatives to gain Bitcoin exposure through the platform legally.

Why Zerodha Doesn’t Support Direct Bitcoin Trading

Understanding Zerodha’s limitations helps navigate your crypto investment strategy:

• Regulatory Boundaries: SEBI (Securities and Exchange Board of India) hasn’t approved cryptocurrencies as securities. Zerodha complies strictly with SEBI guidelines.
• Platform Focus: Zerodha specializes in traditional assets—stocks, ETFs, futures, and mutual funds. Crypto integration would require new infrastructure and regulatory clearance.
• Tax and Compliance Risks: Cryptocurrency transactions in India attract 30% tax on gains + 1% TDS. Brokers like Zerodha avoid this complexity to maintain compliance.

3 Alternative Ways to Gain Bitcoin Exposure via Zerodha

While you can’t buy Bitcoin directly, these Zerodha-supported methods offer indirect access:

1. Invest in Bitcoin-Related Stocks (Through Zerodha)

• How It Works: Buy shares of companies heavily invested in Bitcoin, like MicroStrategy (MSTR) or Coinbase (COIN), via Zerodha’s international investing partner Vested.
• Steps to Buy:
  1. Enable international trading in your Zerodha console.
  2. Fund your USD account via Liberalised Remittance Scheme (LRS).
  3. Search for “MSTR” or “COIN” and place an order.
• Pros: Regulated, accessible via Zerodha ecosystem.
• Cons: Indirect exposure; stock performance ≠ Bitcoin’s price.

2. Bitcoin-Themed Mutual Funds & ETFs

• Options on Zerodha:
  • International Blockchain ETFs (e.g., Invesco Elwood Global Blockchain ETF) via Vested.
  • Domestic mutual funds with crypto-adjacent holdings (e.g., DSP Global Innovation Fund).
• How to Invest: Use Zerodha Coin to search for funds containing “blockchain” or “digital asset” themes.

3. Equity Derivatives (High-Risk)

Trade NSE/BSE-listed stocks of Indian companies exploring blockchain tech (e.g., Tanla Platforms). Note: This offers minimal Bitcoin correlation.

Step-by-Step: Buying Bitcoin-Linked Assets via Zerodha

Here’s how to purchase international Bitcoin stocks using Zerodha’s integration with Vested:

1. Activate International Investing: In Zerodha Console, go to “Account” → “International Investing” and sign up with Vested.
2. Complete KYC: Submit PAN, ID proof, and income details per LRS rules.
3. Fund Your Account: Transfer INR → USD (max $250,000/year under LRS).
4. Search & Buy: In Vested, search for “MSTR” (MicroStrategy) or “COIN” (Coinbase). Place a market/limit order.
5. Monitor: Track holdings in Zerodha Console under “International Investments.”

Critical Risks and Limitations

• No Direct Ownership: You won’t hold actual Bitcoin—only correlated assets.
• Volatility: Crypto-linked stocks can swing wildly with Bitcoin’s price.
• Currency & Fees: LRS transfers incur forex charges + Vested brokerage fees.
• Regulatory Shifts: SEBI or RBI policy changes could impact access.

FAQ: Buying Bitcoin via Zerodha

Q: Can I buy real Bitcoin on Zerodha?
A: No. Zerodha only supports SEBI-regulated assets. Use Indian crypto exchanges like CoinDCX or WazirX for direct purchases.

Q: What’s the cheapest way to get Bitcoin exposure through Zerodha?
A: Bitcoin-themed ETFs via Vested have lower fees than stocks. Expect ~0.5-1% expense ratios.

Q: Are Bitcoin mutual funds available on Zerodha Coin?
A: No SEBI-approved mutual funds directly hold Bitcoin. Some “blockchain” funds hold companies like NVIDIA or Coinbase.

Q: How are profits taxed?
A: International stocks: 20% with indexation after 2 years. Short-term gains taxed at income slab rates. Crypto-specific taxes don’t apply.

Q: Will Zerodha add crypto trading soon?
A: Unlikely unless SEBI regulates cryptocurrencies. Zerodha’s CEO has publicly expressed skepticism about crypto as an asset class.

Conclusion: Diversify Wisely

While Zerodha doesn’t facilitate direct Bitcoin purchases, its integration with platforms like Vested lets you tap into crypto-adjacent markets. For actual Bitcoin ownership, use dedicated Indian crypto exchanges. Always prioritize regulatory compliance, diversify investments, and consult a financial advisor. As India’s crypto landscape evolves, stay updated via Zerodha’s official blog and SEBI announcements.