How cryptocurrency Bitcoin became young India's dream investment
According to reports, the country currently has more than one crore crypto investors, and the number is significantly growing every day
If the mega cryptocurrency has left you nervous, especially if you are an investor in digital coins like Bitcoin or Ethereum, hold your nerves as there is a silver lining in the mayhem the crypto asset class experienced last week.
While the short volatile period has widely been touted as a course correction (one Bitcoin is currently hovering around $37,000 after touching a record high of nearly $60,000 just a couple of weeks ago), industry experts are of the view that staying invested and thinking long-term is the thumb rule to follow for crypto investors in the country.
India is increasingly adopting Bitcoin and other cryptocurrencies. According to reports, the country currently has more than one crore crypto investors, and the number is significantly growing every day with several domestic crypto exchanges operating in the country.
According to Rahul Pagidipati, CEO, ZebPay, Indian investors are learning to view Bitcoin as an asset class that belongs in every long-term portfolio.
"Indians own less than 1 per cent of the world's Bitcoin. Being left behind will create a strategic disadvantage for the Indian economy. In 2021, we expect more institutions and government officials to recognise that we need to close the Bitcoin gap," said Pagidipati.
In April 2018, the RBI ordered financial institutions to severe ties with individuals or businesses dealing in virtual currency such as Bitcoin. However, in March 2020, the Supreme Court allowed banks to continue handling cryptocurrency transactions from traders and exchanges, giving a respite to the crypto investors.
In March this year, Finance Minister Nirmala Sitharaman said that all windows on cryptocurrencies will not be closed down, bringing further relief to the stakeholders.
Earlier this month, RBI Governor Shaktikanta Das said that the central bank has flagged major concerns over cryptocurrency to the government.
Amid the uncertainties lies the fact that a 40 per cent dip in the Bitcoin price from its all-time high looks dramatic but is normal in many volatile markets, including crypto, especially after such a large rally, say industry players.
"Such corrections are mainly due to short-term traders taking profits. Investors should invest in education first. Research the underlying value of Bitcoin, Ethereum, and other crypto assets as you might look at a company's information before buying stocks," said Avinash Shekhar, Co-CEO of ZebPay.
Buyers are aggressively accumulating more and more Bitcoins. This is the driving factor that has propelled the price growth of the digital coin.
According to Prabhu Ram, Head-Industry Intelligence Group, CMR, if one were to look back at the last decade, such volatility is consistent and on par for crypto.
"While over the short term, one may feel concerned, the long-term horizon view is positive. Going forward, Bitcoin will continue to remain a small but significant investment in the investor portfolio," Ram told IANS.
The key industry players feel that India is a tech and economic power that will emerge as a key player in crypto and Blockchain adoption.
According to Sumit Gupta, CEO and co-founder of cryptocurrency exchange CoinDCX, cryptocurrency has "now classified itself as a macro asset class for investments that can't be ignored.
"It will further lead greater mainstream acceptance than ever before," Gupta had told IANS.
*Edited from an IANS report