Got 20L sitting idle and thinking 5 year horizon, should I just DCA into BTC monthly or is there actually any point looking at crypto hedge funds in India given the tax situation here?

Honestly the tax angle is where most people mess up this comparison. If you DCA into spot BTC and make 10L profit, you're paying 30% flat under Section 115BBH. No deductions except what you paid to buy it. No setting off losses against other income. Nothing.

Derivatives get treated as speculative business under Section 43(5), which means slab rates apply. So if your total income stays under 12L, the 87A rebate could literally mean zero tax on those gains. Same 10L profit, wildly different outcomes.

The catch with SIP into spot is you're also eating 1% TDS on every transfer above 50k per year. Small but it adds up over 5 years.

For hedge funds, the PwC data shows 47% of traditional hedge funds now have crypto exposure, up from 29% last year. Family offices are the biggest allocators to crypto hedge funds globally. Grade Capital is one option I've seen discussed for derivatives exposure in India specifically.

My take, if you're aggressive and want tax efficiency on a 5 year bet, derivatives route makes more sense than raw BTC accumulation. The 30% flat rate on spot is brutal for anyone actually trying to compound gains.