New avenues like crypto illustrate aggressive appetite and risk taking


For about four months, we have all been glued to the Star Sports channel, the IPL being followed by the World Cup. Obviously, the 20-20 format has caught on. As a spectator, a lady in an athletics race was also reportedly seen suddenly sitting down to access the mobile for stock updates. The message is that we must not miss such opportunities and that the race comes second. In between we saw another star smile and tell you to do money on cryptos. Yes, this is the latest buzz on the market and there is money to be made. And then there are some cricketers, who may not have a graduate degree but are smart enough to tell you that mutual funds are right and you need to invest with caution. Welcome to the new world of saving and investing, which emulates the changing interest or popularity of cricket formats.

Today, we don’t have the patience to watch five-day matches. Those who swear by Test cricket are of the older generation. So is the same generation that continues to save in substandard bank deposits where the returns are 2.75 percent in a savings account or 5 percent in a term deposit. The younger population sees the futility of these instruments as the economy does not freeze. Everyone wants instant gratification, and why not, because even if you manage 5% on the deposit, you could lose a third of it in taxes, which makes a mockery of such savings. Obviously the banks are not giving us anything significant as a return. The alternatives are more tempting.

The cult of savers has turned into investors. They are looking for a good return and are willing to take the risk. This is a major change that we are seeing today. Crypto exchanges assure you that they are safe. But it is the exchange that is safe, not the value of the coin, which will be determined by the market. The fairness boom is on and all the unicorns have given great results. Newspapers are teeming with radiant smiley startup founders as they step into the backyard of the big billionaires. Today no one is talking about investing in Nifty companies. It is the new age start-ups that have seen the market salute, even if the companies are in deficit. It’s like cricket. We remember who won the World Cup, the IPL or the Challengers Cup, but we may not remember when India faced the West Indies or Bangladesh in a series of tests. Stadiums say it all, with audiences coming in in greater numbers all over the world as the format of the game gets shorter.

There is a new wave of saving and investing in the country which is changing quite rapidly. Bitcoins have given incredible returns; the Sensex at 60,000 is what we love to be a part of. We don’t want spines like Dravid on the pitch but Kohli, Jadeja and Pandya are delights to watch. This is why bank deposits are no longer on our plates. Interestingly, banks are now discouraging low rate deposits because it is the only way to manage their balance sheets. There is little scope for deployment and paying 5% interest to savers and investing 3.35% deposits in the reverse repo auction is a sub-optimal game.

We would also have noticed that there are no advertisements from banks on deposits. They don’t want it. Instead, there are multiple withdrawals on 6.5% home loans or 7% auto loans. We could never have dreamed of obtaining loans at such low rates. It sounds incredible but it is true. You are not told to save for tomorrow, but to borrow more to meet your immediate needs.

From stocks, there has been a quick shift to cryptos, which is still a gray area. Regulators / government are wondering what to do. The question will be discussed during the winter session of Parliament. But investments have been made and nothing is stopping this global wave. Making money on a currency that has no underlying asset like a metal or other currency and that is traded on faith is unique; especially Bitcoin, whose initiator is not known face-to-face but just by name. But people have put a value on money and eventually in a market, if there are thousands of people who believe in the value, it gets absorbed.

If that wasn’t quite intoxicating (World Cup games also had relentless doses of alcohol and tobacco substitute ads, which billed themselves as harmless water and deodorants) , there is another door to a new kind of game where you earn money making teams and after matches. You pay to enter this game and part of the loot is kept, the rest is distributed to players after paying taxes. The law was first silent, then confused. But he finally accepted the game as a skill. Logically, we should soon be able to bet on the matches too, if all that is in order.

Cricket formats have engendered passion, and not just from a gaming perspective. But have they also spurred a shift in the format of money holding, where saving turns into investment and the appetite for money. does the risk shift from conservative to aggressive? Will this change? Probably not, in the near future, as long as conventional deposits continue to give lower returns.

The writer is a freelance economist

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