Crypto industry sees ‘muted optimism’
In 2022, the industry had faced turmoil with FTX, LUNA collapses that jolted the crypto market.
Published: 25th April 2023 08:17 AM | Last Updated: 25th April 2023 08:17 AM | A+A A-
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BENGALURU: With Bitcoin surpassing the $30,000 mark in the second week of April, there is a sense of muted optimism in the crypto ecosystem, as exchanges and investors believe the worst phase is over now.
In 2022, the industry had faced turmoil with FTX, LUNA collapses that jolted the crypto market.
“Even though regulatory overhang remains in the US, we are witnessing bright spots emerge from global jurisdictions with the EU’s adoption of MiCA (Markets in Crypto Assets) and regional crypto hubs being established in Dubai, the UK and Hong Kong,” said a spokesperson from CoinSwitch.
Though BTC touched $30,000, it is trading below $27,500. Experts attribute the dip to various factors including macroeconomic conditions such as the unexpected high inflation data in the UK and the recent spot selling that occurred on Binance.
“Glassnode’s recent data reveals 32.3 per cent of the BTC supply became profitable when prices reached $30,000. Hence, the selloff when BTC reached the $30,000 mark was quite expected. There is anticipation for the upcoming US Federal Reserve meeting in May, regarding interest rate hikes. With the bank crisis in the US now subsiding, individuals may be liquidating their assets, resulting in a strengthening of the dollar,” said Edul Patel, CEO and co-founder of Mudrex.
He added that despite these developments, BTC is still up by 99 per cent since its lowest cycle this year, when BTC was at $13,701 on January 7, 2023. Crypto exchanges say the country has progressed significantly in terms of crypto regulations.
“In March 2023, crypto entities were included as reporting entities under the Prevention of Money Laundering Act (PMLA), which is the first step towards bringing regulations to the industry. Crypto exchanges in India will now need to comply with the PMLA laws, implement robust KYC and enhanced due diligence for users, retain data of all transactions by the users on the exchange and timely reporting to the Financial Intelligence Unit,” said Punit Agarwal, founder, KoinX a crypto taxation platform.
