While the Indian government deliberates over a legal and regulatory framework for digital currencies, the explosion in popularity and subsequent demand for bitcoin has overwhelmed the country’s exchanges.
India, like the rest of the world, is seeing an unprecedented demand for bitcoin amid extensive media coverage of an ongoing bull run by the world’s most widely-known cryptocurrency.
Such is the demand that one of India’s major exchanges, Coinsecure, had to temporarily shutter trading as it caught up with a backlog of transactions. The exchange is back up and functioning today.
Furthermore, the lack of robust mining resources locally has seen sent prices spiraling with a lack of supply, with significant premiums for buying bitcoin in the country. As bitcoin prices in US markets hit an all-time high of $2,750 on Thursday, Indian exchanges were trading bitcoin at INR₹230,000, approx. $3,500.
Exchanges are also looking at other ways to resist the demand that exists despite the premiums during a shortage of bitcoins. Zebpay, an app-only bitcoin exchange and wallet provider is enforcing ‘temporary’ buy limits on bitcoin purchases.
Making the announcements on its Twitter account, Zebpay wrote:
[W]e have put temporary but limits of Rs. 50,000 per day due to the shortage of bitcoin stocks. These limits are temporary and will be revised as market conditions change.
Zebpay also cautioned new bitcoin adopters about the current volatile climate – a sign of the cryptocurrency’s permeation into the mainstream.
“Bitcoin prices are very volatile right now. Please use caution while investing,” the exchange wrote. “This is a new technology innovation on a global but early stage. Your investment should match your knowledge. Be safe!”
On Friday, Zebpay added that its “support number is overwhelmed with calls from new users,” underlining the influx of new adopters streaming in to buy the cryptocurrency. Last week, the app-only exchange hit a notable milestone of half a million installs of its Android application. Zebapy also claimed it was adding 2,500 new users every day, a number that has gone up since.
The bitcoin boom in India comes at a time when the government is currently determining its course of action for legislating digital currencies in the country. After setting up a committee to study, research and recommend a framework for digital currencies in April, India’s Finance Ministry is presently soliciting suggestions from the Indian public on digital currencies.
At the time of publishing, data from India’s best-funded trading platform shows the price of one bitcoin at INR ₹200,285, which is a little over $3,100. The figure is a premium of over $600 when compared to trading on Bitstamp which currently shows $2,467.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:47 AM UTC