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…
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.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:46 AM UTC