Crypto
Can the Bitcoin surge push India to overcome its cryptocurrency hurdles?
The recent remarkable surge in Bitcoin prices has sparked a pertinent query among Bitcoin investors: Will this trend change the fortunes of Indian cryptocurrency firms?
The nation’s cryptocurrency exchanges are witnessing a substantial burst in demand, driven by the recent skyrocketing of Bitcoin prices to unprecedented highs.
The Indian cryptocurrency platform CoinDCX, for instance, has reported a significant five-fold increase in trading volumes over the past month.
âSpecifically, our spot trading volume, which began around $5 million at the beginning of February, rose to approximately $25 million by February 28,â says Sumit Gupta, co-founder of CoinDCX.
âThe recent surge in Bitcoin’s value has undeniably ignited a wave of enthusiasm and confidence.â
Meanwhile, India’s largest cryptocurrency exchange, WazirX, which is based in Mumbai, is also experiencing significant growth in cryptocurrency transactions.
âMy servers are humming at overcapacity,â says Rajagopal Menon, vice president, WazirX, which has experienced a 20-fold increase in trading volumes since the beginning of the year.
âMy new users are up, my daily traffic is up. So, the long and short of it is that it is a function of sentiment â the moment price goes up, it’s herd mentality and everyone wants to buy. So, we are definitely seeing an uptick in people wanting to buy their favourite crypto.â
Tax burden
Despite the rise in investor interest, volumes are still down from their peaks as crypto exchanges are burdened by heavy taxes imposed by the country.
In 2022, India imposed a 30 per cent tax on profits from cryptocurrencies, as well as a 1 per cent tax on all transactions of the virtual assets.
While “there is no dearth of people” wanting to invest in cryptocurrencies, Mr Menon says, that âretail investments have not reached the peak that we saw in 2021â.
This development coincides with the growing apprehensions expressed by Indian authorities regarding cryptocurrency trading. The risks associated with it, coupled with fears of potential misuse for illicit activities like money laundering, have raised concerns.
There’s also a worry that it could pose a threat to the stability of the nation’s financial system.
These concerns resonate with numerous nations worldwide, including India. The Indian authorities are indeed wrestling with the challenge of how to regulate these assets, especially considering their sustained popularity.
Bitcoin, the largest cryptocurrency, has risen by almost 54 per cent year-to-date to over $68,000 as of Friday evening. This was lower than the new all-time high it reached on Thursday of $73,803, which dived further down to about $65,000 on Sunday.
The rise of Bitcoin has been driven by various factors, such as inflows into US spot exchange-traded crypto products and the expectation of global interest rates falling. This often leads traders to redirect capital into risky assets.
Investor interest in cryptocurrencies has grown following the approval of 11 spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission in late January.
The Bitcoin âhalvingâ event is anticipated to occur in April, resulting in a reduction in the rate at which new coins are generated. Historically, these events have led to an increase in the value of the cryptocurrency.
Indian exchanges are pleased to witness a resurgence in investor demand, after a challenging period for the sector.
âWe’ve witnessed a remarkable 150 per cent increase in spot market trading volume,â says Mr Gupta. âThis surge in demand for Bitcoin is fuelled by the launch of Bitcoin ETFs, signalling a maturing market.â
The growth trend is not limited to Bitcoin.
The company has seen âsignificant growth across large-cap cryptocurrencies like Ethereum, Solana, Shiba Inu, and Binance Coinâ, says Mr Gupta.
The rise in demand âisn’t just confined to retail investors â we’ve also seen a notable increase in engagement from high-net-worth individuals and institutional investorsâ.
Regulation catch-up
However, despite the renewed interest in virtual assets, exchanges are reporting that the current tax regime continues to dampen investor appetite.
âChanges in India’s regulatory landscape, including a new tax regime, have influenced the cryptocurrency appetite,â says Pranav Srivan Elankovan, founder of Crypfi, a cryptocurrency exchange.
âThe introduction of taxes and regulatory uncertainties has prompted investors to adopt a more cautious approach, potentially dampening demand.â
The taxes in 2022 have had an enormous impact on the industry, Mr Menon says.
âThe moment this happened, [crypto investors] stopped trading in India,â he says.
âThey fled to exchanges abroad, because crypto knows no boundaries. So, you had a lot of foreign exchanges or offshore exchanges benefiting from Indian customers actually shifting the capital abroad.
âOur volumes were down by 90 per cent in the bear marketsâ, by the end of 2022 and last year, he says.
However, he adds that the âIndian government has taken a very serious view of offshore exchanges not complying with Indian lawsâ and is taking steps to prevent Indian citizens from trading cryptocurrencies on them, thereby benefiting Indian exchanges.
In January, India blocked access to the websites of major global cryptocurrency exchanges after issuing notices to them for not complying with the country’s money laundering laws.
Furthermore, despite the high 30 per cent tax rate, it is widely accepted within the industry that this serves as a clear indication that the government acknowledges cryptocurrencies as a legitimate form of investment. Speculation had long persisted that India would impose a ban on cryptocurrencies.
âSustained demand hinges on ongoing regulatory clarity and the confidence of investors in the Indian cryptocurrency market,â says Mr Elankovan.
Sidharth Sogani, the founder and chief executive of the cryptocurrency research firm Crebaco, made the decision to relocate from India to Dubai three years ago. He cited the UAE’s more ârobust and open-mindedâ approach to the cryptocurrency market as a key factor in his decision.
He states that despite the Bitcoin rally, Indian cryptocurrency exchanges are still at a disadvantage.
âVolumes have not reached the previous bull cycles we observed in 2021, when the market had a way higher volume, and exchanges were more aggressive and they were advertising a lot,â says Mr Sogani.
He asserts that regulation is of paramount importance.
âIndia is not a regulated market for crypto. It is legal, but it’s not regulated â they are two different things,â says Mr Sogani.
âWhen you say regulation, that means the regulatory body is responsible for all the market exchanges to report in a certain manner and that regulatory body does not exist yet. Once it does exist, there will be a different market for India.â
What is Bitcoin and how did it start?
The exchanges have expressed their openness and readiness to embrace a regulatory framework.
âWe want clear guidelines,â says Mr Menon. âFor example, it’s very difficult, even now, for Indian crypto companies to get reliable banking connections.â
But he believes âa change is on the horizonâ. This belief stems from India’s recent actions under its G20 presidency, which together with other member nations, embraced a strategic plan to guarantee a synchronised execution of a policy framework for crypto assets.
âWe are hopeful that regulation will make the [cryptocurrency] industry a better place to be in and things would be much better in the coming years for India,â says Mr Menon.
Updated: March 18, 2024, 5:30 AM
Crypto
Why Elon Musk wants to bring crypto to X
Since Elon Musk bought Twitter and rebranded it to X, the 52-year-old has perpetually been at the centre of the news cycle for his various business decisions.
From removing the verified feature to banning the term “cisgender” on the platform, he’s been an interesting owner of the social media platform.
Musk has previously stated his desire to have X become an “everything app”, but what does this mean? And where does cryptocurrency fit into this plan?
X payments chief information security officer, Christopher Stanley, recently wrote on the platform: “The end goal is if you ever have any incentive to take money out of our system, then we have failed, you shouldn’t ever need to take money out because you should be able to do anything you need on our platform.”
Stanley made the post after X acquired money-transmitter licenses in some US states, allowing the app to facilitate US dollar and crypto payments.
“Think Venmo at first,” Stanley wrote. “Then, as things evolve, you can gain interest, buy products, eventually use it to buy things in stores (think Apple Pay), etc.”
Since Musk took over the platform, there has been speculation on whether he would try to integrate cryptocurrency into the platform and it appears the answer is yes.
Musk has offered a few reasons for this.
To begin with, if X wants to incorporate the use of money on its platform, Musk wants this to include cryptocurrency, rather than just flat money, like US dollars.
In October, Musk said: “If it involves money. It’ll be on our platform. Money or securities or whatever.”
Musk has also stated that he wants X to become an “updated version” of PayPal, although PayPal already supports cryptocurrency, rolling out support for bitcoin, ethereum, lite coin and bitcoin cash in 2020.
The CEO of Tesla also recently made it possible to purchase Tesla vehicles with the cryptocurrency Dogecoin, and in America it’s possible to buy a Tesla with bitcoin, so it makes sense that he would incorporate his other products to support crypto.
Additionally, Musk has helped surge the price of Dogecoin, alongside other cryptocurrencies, since he teased crypto integration.
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Crypto
Shiba Inu's Burn Rate Soars, Cathie Wood Believes Ethereum Could Catch Up To Bitcoin And More: Top Crypto Updates This Week
The week was a rollercoaster ride in the world of cryptocurrency. From Shiba Inu’s skyrocketing burn rate to the rising concerns about overvaluation in the crypto market, there was no shortage of action. Meme coins continued to make waves, with Pepe and Dogecoin gaining traction. Meanwhile, Cathie Wood of Ark Invest made a bold prediction about Ethereum. Here’s a recap of the top stories.
Shiba Inu Burn Rate Skyrockets – Shiba Inu SHIB/USD is back in the spotlight with a significant increase in burn rates and wallet movements. Data from Shibburn revealed a 2,211.9% spike in burn rate in the past 24 hours, with a single transaction burning 1.8 million SHIB coins. Read the full article here.
Crypto Greed Peaks, But Prices Don’t – Twitter personality WazzCrypto expressed concerns about the current state of the cryptocurrency market. He highlighted the prevalence of overvaluation, with many new projects launching with valuations exceeding $10 billion. He also discussed the impact of memes on market sentiment and the influx of new money into the cryptocurrency space. Read the full article here.
See Also: ‘Dogecoin Killer’ Shiba Inu Burn Rate Drops Over Last 24 Hours, Mirrors Decline In Price
Pepe May Flip Shiba Inu and Dogecoin – Pepe PEPE/USD has generated significant gains over the past seven days, prompting analysts to foresee further bullish price action. Meme coin analyst and trader Murad believes that Pepe, a “cult community with more than 10 million unique memes,” could flip Shiba Inu and Dogecoin. Read the full article here.
Memecoins Fueling Mass Adoption Of Base’s L2 Network – Jesse Pollak, the creator of Base of Coinbase, attributed the burgeoning adoption of the layer-2 network to the rise of memecoins. He emphasized the influence of memecoins in integrating a significant number of users into the Base ecosystem. Read the full article here.
Cathie Wood’s Ethereum Prediction – Cathie Wood of Ark Invest believes that Ethereum ETH/USD could catch up to Bitcoin BTC/USD and provide investors with huge profits in the coming years. She predicts that Ethereum could reach a market capitalization of $20 trillion by 2032. Read the full article here.
Read Next: Meme Coins Are ‘A Pure Ponzi’ And ‘Destroying Crypto,’ Says Trader Who Thinks Dogecoin Was Different
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Crypto
Ace Exchange Founders Face 20-Year Sentence in Fraud Case
The Taipei District Prosecutors’ Office of Taiwan’s cryptocurrency sector has indicted 32 people on fraud and money laundering charges. This cluster includes individuals like JackIssue founder David Pan and his associate, Lin Keng-hong, who is involved in Ace Exchange. The prosecutors are suggesting a 20-year jail term for the four principal suspects, a crucial milestone in this continuing court case.
Taipei Police Raid Ace Exchange, Arrest 15
The indictments outline a sophisticated fraud that left over 1,200 investors misled and losses currently estimated at almost 800 million New Taiwan dollars ($24.56 million). This amount is far above the original estimates, which were only 340 million NT$ ($10.6 million). One of the most important figures indicted is Wang Chen-huan, a well-known lawyer and the chairman of Ace Exchange, who would potentially face 12 years of imprisonment if found guilty. His participation as a legal consultant provided a sense of legitimacy to the false actions.
Taipei City Police apprehended David Pan and 14 others in January 2024 after a detailed investigation. The raid hit several places, including the principal office of Ace Exchange. The probes found connections with a fake crypto wallet service, known as “Alfred” or “Afu wallet,” and associated cryptocurrency cards.
Ace Exchange Denies Ties to Founder Pan
In 2019, the suspects actively promoted a number of token investments, among them NFTC tokens and bitnature coins, and issued devious white papers and promotional materials. They aimed to make Ace Exchange the top blockchain ecosystem for crypto trading in Asia. Nevertheless, the reality for investors was far more harrowing, as their tokens would lose value without being able to be converted back to fiat currency, despite the assurances given.
This financial incongruity resulted in many investors filing lawsuits, which has brought about the current charges. Seizing the defendant’s assets, the court has already acted, the value of which is at least 3.5 million NT$ ($110,000), thus providing a kind of compensation for the fake investors.
In response to the indictment, Ace Exchange declared on April 8 that David Pan is not associated with Trader’s Paradise, that he has not been related to the day-to-day operations since 2022, and that his accused fraudulent activities were not connected to the platform’s current operations. However, such a guarantee did not help restore Ace Exchange’s trust.
Read Also: US DOJ Fights Back Against Tornado Cash Founder’s MTD Request
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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