Bit­coin-Re Swap Dives, But In­vestors Un­fazed

Value drops to 2.2 lakh per bit­coin from 3.44 lakh two weeks ago; ex­perts rec­om­mend buy­ing on dips but with cau­tion

The Economic Times - - Markets: Beating Volatility -

Shailesh Menon & Saikat Das

Mum­bai: The bit­coin-ru­pee swap rate went into a free fall af­ter reg­u­la­tors in China forced BTC China, one of the world’s big­gest ex­changes for the dig­i­tal cur­rency, to down shut­ters on Thurs­day. The swap value dropped to ₹ 2.2 lakh per bit­coin from ₹ 3.44 lakh more than two weeks ago, deal­ers said. A state­ment by Jamie Di­mon, CEO of JPMor­gan Chase, that crypto-cur­ren­cies won’t end well fur­ther hit the mar­ket sen­ti­ment.

A bit­coin is a dig­i­tal cur­rency cre­ated and held elec­tron­i­cally. It is not printed or minted but pro­duced by tech­nocrats glob­ally. No cen­tral bank owns or con­trols bit­coins. Go­ing by broad es­ti­mates, the com­bined bit­coin trad­ing vol­umes at all ex­changes in In­dia could be in the range of ₹ 150-200 crore a month. About ₹ 1,200-1,500 crore worth of bit­coins are traded in the coun­try ev­ery year.

“Even af­ter this price drop, bit­coin prices are still at lev­els which were at all-time highs just two months back,” said San­deep Goenka, co-founder of Zeb­pay, a bit­coin ex­change. played down China’s against bit­coins.

“China has not banned de­cen­tralised crypto-cur­ren­cies like bit­coin and ether,” he said. “This has hap­pened many times in the past. Goenka ac­tion Th­ese are just road bumps as reg­u­la­tion and in­no­va­tion need time to sync well with each other.”

In In­dia, peo­ple use the cryp­tocur­rency as an in­vest­ment ve­hi­cle and bet on bit­coins. The re­cent price drop is seen as a great “buy- ing op­por­tu­nity” by bit­coin in­vestors and spec­u­la­tors.

“This was more of a panic sell­off,” said Sahil Shah, a third-year BBA stu­dent at Nirma Univer­sity in Ahmed­abad and a bit­coin in­vestor. Shah has added one more bit­coin to his to­tal of five in the re­cent price-fall.

“Spec­u­la­tors are out of the mar­ket now. Peo­ple who are buy­ing now are strong hands. Bit­coin prices will gain in term,” Shah added.

Con­ser­va­tive wealth ad­vi­sors said peo­ple should not get over-ex­posed to crypto-cur­ren­cies be­cause their prices can be very volatile. More­over, dig­i­tal cur­ren­cies are not le­gal even in de­vel­oped coun­tries, re­sult­ing in low util­ity value. Bar­ring some ecom­merce por­tals, not many mer­chants use bit­coins in daily op­er­a­tions. Some In­dian techies liv­ing abroad are said to trade in the dig­i­tal cur­rency to ben­e­fit from the ar­bi­trage on val­ues—buy­ing bit­coins in over­seas ex­changes and sell­ing them lo­cally at higher prices.

“The lat­est dip in bit­coin value may not mark the end of bit­coin in­vest­ments,” said Manoj Nagpal, CEO of Out­look Asia Cap­i­tal. “Dig­i­tal cur­rency as an in­vest­ment is not a taboo. But the Re­serve Bank of In­dia needs to give its stamp to make this in­vest­ment valid.” the near

MANOJ NAGPAL CEO, Out­look Asia Cap­i­tal Dig­i­tal cur­rency as an in­vest­ment is not a taboo. But the Re­serve Bank of In­dia needs to give its stamp to make this in­vest­ment valid

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