BENGALURU: On Friday, when Tesla CEO Elon Musk simply wrote #Bitcoin on his Twitter Bio, the cryptocurrency soared 14 per cent to touch a two-week high of $36,901 (roughly `26.9 lakh) value. When the world’s richest man says it, people listen!
Musk’s 43.8 million followers, including many Indians, went into a crypto frenzy, debating whether the investments in digital currencies are back on track.
After rallying 300 per cent last year, when people compared Bitcoin with traditional favourite asset gold, January saw its value decline to below $30,000 until Musk’s declaration of love for crypto.
Last month, he even hinted at converting some part of Tesla’s transactions into digital currency.
Back in India, Bitcoin fans are now not as upbeat, especially because the government may soon be banning all the private digital currencies.
A Bill will be reportedly tabled in Parliament during the Budget session aiming to introduce an official digital currency through the Reserve Bank of India.
The new law will also make certain exceptions pertaining to the technology which is crucial to cryptocurrency.
Ever since the Supreme Court overturned the 2018 RBI-imposed ban on cryptocurrencies in March 2020, investors as well as the crypto exchanges in India have been throwing their weight behind it by pouring money into digital assets.
The Indian banks had also started allowing investors/ traders to trade on the platforms using their bank accounts which resulted in a huge surge in digital asset owners.
However, now, the investors are advising wait-and watch policy for clarity in the regulatory environment.
“We have heard that the Bill is most likely to be passed in Parliament soon. This will result in an unprecedented sale of Bitcoins at exchanges. In India, a trend seen on the exchanges is holding Bitcoins for medium term (3-5 years) in wallets much like any other asset. However, we are most likely going to see a surge in trading and sale of cryptocurrencies,” Manjunath Shetty, a retail investor and an engineer said.
The change in regulations in India have come at a time when the global investment majors as well as businesses have placed their bets on Bitcoin for the long term and eventually taking the crown off gold as the choice asset.
“Indian investors are usually averse to high-risk trading, which crypto currency is. However, the millennial and the educated class have shown interest in Bitcoin lately. It may be sometime before we see a huge sale of Bitcoins on exchanges in India,” Shetty added.
Why mull a ban
Governments around the world have been looking into ways to regulate cryptocurrencies but no major economy has taken the drastic step of placing a blanket ban on owning them, even though concern has been raised about the misuse of consumer data and its possible impact on the financial system