As the mainstream continues to fixate on the bitcoin prices’ soaring gains in markets around the world, the cryptocurrency is also catching the eye of young traders in India.
Bitcoin’s all-time high prices in May left major Indian bitcoin exchanges reeling under the stress of having to accommodate a flurry of new adopters of the cryptocurrency. Coinsecure cited an “exponential growth” of bitcoin users as the exchange, launched in 2013, stopped processing withdrawals amid a backlog of transactions in May. App-only based bitcoin exchange Zebpay enforced temporary ‘buy limits’ last week due to a combination of factors where a shortage of bitcoin supply was unable to meet the soaring demand.
The demand for the cryptocurrency is particularly seeing a marked increase in the 18-35 age group, according India’s leading business daily, the Economic Times. The appeal of making significant profits from buying low and selling high in a volatile market is a strategy that young traders are reportedly willing to take up.
One young trader, a final-year bachelor’s student studying business administration, stated:
This rally was almost a bubble, but it gave solid profit-booking opportunity for investors who bought bitcoins two or three years ago. I will buy back once prices correct a bit more.
The student, Sahil Shah, says he traded four bitcoins which he purchased at a cost of ₹70,000 each (approx. $1100) before flipping it for ₹220,000 (approx. $3,400) each. Buying bitcoin on Indian exchanges came at a premium, with the cost of one bitcoin through Unocoin, India’s leading exchange, hitting an all-time high of ₹230,598 or $3572. An $850 premium compared to bitcoin prices on USD Markets.
“The increasing awareness of bitcoins worldwide, particularly about its revolutionary technology, has triggered a rally in the bitcoin market,” the publication cites Zebpay co-founder Sandeep Goenka as stating. The bitcoin executive points to Japan as one of a growing list of countries introducing regulation for bitcoin, fueling the recognition and adoption in the mainstream as a result.
Indian authorities are currently in the process of determining the legal and regulatory future of bitcoin in the country. India’s Finance Ministry (FinMin) established an inter-governmental committee to study a framework for virtual currencies in March. In May, the FinMin opened itself for suggestions from the public. A fleeting glance through the comments show a near unanimous call for bitcoin to be legalized as the country embraces digital payments following last year’s controversial demonetization drive.
Despite calls against its legalization by a smattering of politicians, India’s government – which is looking at the regulatory paths chosen by countries like Japan and the United States – is by most accounts set to regulate bitcoin and tax adopters in the country.
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Last modified: May 21, 2020 9:46 AM UTC