Bitcoin breached $50,000 mark for the first time on Tuesday, mainly due to increasing interest and participation from institutional investors
Bitcoin is on a rising spree. The cryprocurrency has touched $51,500 for first time, breaching its earlier high of $51,300 in last 24 hours. Bitcoin breached $50,000 mark for the first time on Tuesday, mainly due to increasing interest and participation from institutional investors. “With credible and major institutions like Tesla, MasterCard, Paypal, Microstrategy adopting them into their ecosystem we are witnessing a continuous rise in demand for bitcoin, thus pushing the valuation higher. In addition, companies such as Google Pay, and Samsung Pay too are now contemplating making inroads into cryptocurrency via Bitpay,” says Sumit Gupta, CEO & Co-Founder, CoinDCX, the largest cryptoexchange in India.
Bitcoin grew by a whopping 313% in 2020. And with each passing day, we are seeing it breaking every resistance.
Crypto experts expect the trend to continue with new products build around Bitcoin. They remain optimistic of higher participation by institutional and retail investors. They believe the value of bitcoin to go even higher, infact, double from the current price levels, with short-term volatility.
“It’s not just speculation. It’s smart value investing by institutions, individuals, and even governments in a breakthrough technology. Bitcoin is an inflation-proof, corruption-resistant store of value backed by more reliable and transparent accounting. That is real value. In the near future, we’ll see 60, 70, and $100,000. In between, we’ll also see volatile dips and the usual reports about the bubble bursting. Bitcoin isn’t a bubble. It’s a part of our economy now,” says Vikram Rangala, CMO, ZebPay.
The state of cryptocurrency, including Bitcoin, in India however looks confusing. Finance Minister Nirmala Sitharaman last week said that an inter-ministerial committee has suggested ban on private cryptocurrencies in India, except any virtual currencies issued by state. Industry experts feel Indian investors should not be deprived to participate in the booming market of digital assets.
“The recent development around Bitcoin testifies the fact that world is ready to make digital assets mainstream. India, the fifth largest economy in the world, should leverage this trillion dollar opportunity and enable its citizens to benefit from the exponential growth offered by digital assets. As we see central banks across the globe inching towards creating their own digital currency, it will catalyse the adoption of digital assets and create a growth-oriented, positive and transparent digital asset ecosystem,” says Shivam Thakral, CEO, BuyUcoin.
The reach of crypto assets is widening to be a part of a mainstream investment portfolio. Sumit Gupta says, “Analysts from financial institutions like JP Morgan have observed that investors in Gold ETF such as Family units are now looking at bitcoin as an alternative to gold.”
On the contrary, financial planners advise investors to move out of the cryptocurrency due to a lack of clarity of the proposed bill to ban crypto in India. They say it would be a better option for the investors to square off their positions in the near future.
“If the proposal to ban cryptocurrency is put into action and implemented, it would not be possible to square off the deliveries at that time and investors would have to incur huge losses. The seriousness of the following statement could be measured if we revisit to the year 2018 where RBI banned all the banks from processing any transaction related to the digital currency which was later subdued by the Supreme Court last year,” says Nitin Shahi, Executive Director of Findoc, a financial services group.