Tag: cryptocurrency

Will Centre’s crypto hesitancy extinguish a thriving asset class?, BFSI News, ET BFSI

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While the Cabinet ruminates on the cryptocurrency bill, 15 million Indians are now trading in digital coins. This almost puts us in the same league as the US where 23 million people trade in cryptos. At this point, the lack of legal clarity seems to be the only thing stopping a cryptocurrency revolution in India.

For the Indian investor, with cryptocurrency comes hesitancy, particularly in the face of hostility from the Reserve Bank and the Finance Ministry. However, investments in crypto have grown from around $200 million to nearly $40 billion in the past year, as per Chainalysis.

“We are hoping for positive regulations from the government that give clarity to investors and foster the crypto industry further,” said Sharan Nair, Chief Business Officer of crypto exchange platform CoinSwitch Kuber. “There are many people who have been hesitant to invest in cryptocurrencies due to the lack of legal clarity,” he added.

CoinSwitch Kuber has seen exponential growth since beginning operations in June 2020, and expects growth to speed up even more in the event of a favourable regulatory outcome.

“We’ve always voiced in favour of regulatory clarity around crypto assets and we’re looking forward to a regulatory framework that protects investor interest and helps businesses grow in this industry,” said Avinash Shekhar, Co-CEO of cryptocurrency exchange ZebPay.

Zebpay is one of the biggest crypto exchange platforms in the country with over 4 million users and over $1 billion in monthly transaction volumes.

The RBI’s view has been that cryptocurrencies are distinct from blockchain technology. “The Reserve Bank’s position has been that cryptocurrencies should be banned,” Finance Minister Nirmala Sitharaman recently told ET.

An inter-ministerial panel headed by former finance secretary Subhash Chandra Garg had earlier submitted a report seeking a ban on cryptocurrencies and authorising a digital currency of the RBI.

However, there has been more positive messaging from the Finance Minister: “We are not saying no to cryptocurrency. We are saying we’ll have to see how this technology can help fintech maximise the potential that it has,” Sitharaman said.

Crypto exchanges believe that a regulatory framework for crypto assets is the way forward instead of a blanket ban.

“We do not believe that a complete ban is likely as there have been some positive comments from the Finance Minister and talks of developing blockchain technology that is quickly gaining global prominence,” explains Nair.

Cryptocurrencies are also seeing wider acceptance among both retail and institutional investors. India should not be left behind in this revolution, he adds.

There are examples of other countries like Singapore that have effectively implemented laws and regulations around crypto assets, Shekhar points out. “We hope to see regulations that will help investors to experiment with this new asset class and take advantage of this global market.”

Sitharaman wants to work with the Reserve Bank to try and make the regulation a sophisticated one. “I can say the work is nearly complete. It is now for the cabinet to go into it,” the FM told ET.

RBI has indicated that it might soon unveil a central bank digital currency (CBDC), which is legal tender in digital form; essentially a digital rupee. Both Nair and Shekhar – despite differences with RBI on the future of crypto assets – believe this is a step in the right direction.

“e-RUPI, though not backed by blockchain, was a huge step towards acceptance of digital currencies. India’s own CBDC will make transactions and transfers easier”, Nair says.

Shekhar looks forward to seeing the design and role of a nationalized cryptocurrency in the Indian economy: “Especially, the features of the crypto — whether it’ll have a public ledger or not, the type of blockchain it’ll function, and so on.”

Let’s see how it’s handled, Sitharaman remarked.

“Is it possible with just a notification and a rule or is legislation definitely required? It’s a call which the cabinet will have to take,” she said.



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Confusion prevails over method to tax cryptocurrency gains, BFSI News, ET BFSI

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The tax department as well as investors are in a quandary over how to calculate gains on cryptocurrency for taxation purposes, especially since tax laws flounder and conflict against certain regulations and tax is calculated on the value declared by the assessee.

The big question that’s bothering everyone is how are the gains from crypto assets to be calculated? By assuming that cryptocurrencies bought first will be sold first (first in first out/FIFO) or by assuming that the ones bought last were sold first (last in first out/LIFO)?

Take a hypothetical example, if an investor bought one bitcoin in 2017 for $1,000, another in 2018 for $ 13,000. In 2020, of his two bitcoins, he sold one for $7,000.

For taxation purposes, the question is to know which cryptocurrency did he sell — the one purchased in 2017 or the one purchased in 2018.

The difference is that if the “FIFO” method is applied, then the tax will be on the gains of $6,000. And there will be no taxes if LIFO is applied, tax experts said.

“For the purpose of taxation, the FIFO method should be used to account for taxation. But as of today, there is no clarity around this mainly because even the asset class is not defined,” said Amit Maheshwari, tax partner at tax consulting firm AKM Global.

Tax is always levied on gains. That is, sale price minus cost — but due to the nature of cryptocurrencies, ascertaining the cost and the gains have become tricky, tax experts said.

The main problem for taxation is that there is no clarity on what cryptocurrencies are. That is, whether they are currency, asset, commodity or something else. Till that is articulated, investors and traders will be able to get around taxation. The other problem is that tax rates may also differ for someone who is an investor and someone who trades for a living.

“There is no clarity on how to calculate the gains from cryptocurrency and whether it should be traded on a par with capital assets or in case of a trader it should be treated as a stock in trade. Valuation of crypto is also a challenge, particularly on crypto to crypto trades,” said Meyyappan Nagappan, leader, Digital Tax, Nishith Desai Associates.



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Vietnam, India top measure of crypto adoption by individuals

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Global cryptocurrency adoption among individual investors has surged in the past year, according to crypto-analysis firm Chainalysis.

Using factors like peer-to-peer exchange trading volume and value received, Chainalysis said global crypto adoption rose some 881 per cent in the past 12 months.

The firm sees institutional markets as crucial but aimed to highlight the countries with the greatest crypto adoption by retail investors. It focused on use cases related to transactions and individual saving, rather than trading and speculation. Top-ranked countries are Vietnam, India, Pakistan and Ukraine.

“In emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions,” Chainalysis said in the report. It added that “adoption in North America, Western Europe, and Eastern Asia over the last year has been powered largely by institutional investment.”

Also read: What central bank digital currency is and isn’t

Interest in cryptocurrencies has surged since the onset of the pandemic, in part because of substantial gains by digital tokens like Bitcoin and Ether. The Bloomberg Galaxy Crypto Index has climbed about 380 per cent in the past year.

The Chainalysis Global Crypto Adoption Index ranked 154 countries by three main metrics. China and the US both dropped in the rankings, primarily because peer-to-peer trading volume declined. Last year, China ranked fourth and the US sixth. This year, the US is eighth and China 13th.

Chainalysis took out one factor it had used previously: number of deposits by country weighted by number of internet users. The firm found that it skewed the rankings toward countries with comparatively more decentralised finance, or DeFi, users. Instead, it’s creating a DeFi Adoption Index that it said will be available in coming weeks.

Also read:CoinDCX has became India’s first cryptocurrency unicorn

“Growing transaction volume for centralised services and the explosive growth of DeFi are driving cryptocurrency usage in the developed world and in countries that already had substantial adoption, while P2P platforms are driving new adoption in emerging markets,” Chainalysis said, adding a key question is whether new approaches will disrupt those trends.

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Decentralised finance, the latest front in crypto’s hacking problem, BFSI News, ET BFSI

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London: For most of the 13-year life of cryptocurrencies, exchanges were the epicentre for cyberheists. Now, a bigger hacking risk in the growing sector has exploded into view: peer-to-peer crypto platforms.

One such site, Poly Network, was at the centre of a $610 million crypto theft last week, one of the biggest ever. Within days of the heist, the decentralised finance (DeFi) platform said the “white hat” hacker or hackers had returned nearly all the loot.

The unusual ending to the Poly Network saga belies fast-emerging risks in this growing corner of crypto, where an estimated $80 billion or more is held, interviews with industry executives, lawyers and analysts show.

DeFi sites allow users to lend, borrow and save—usually in cryptocurrencies—while bypassing traditional gatekeepers of finance such as banks and exchanges. Backers say the technology offers cheaper and more efficient access to financial services.

But the heist at Poly Network—previously a little-known site—has underscored the vulnerability of DeFi sites to crime. Would-be robbers are often able to exploit bugs in the open-source code used by sites. And with regulation still patchy, there is usually little or no recourse for victims. Centralised exchanges, which act as middlemen between buyers and sellers of cryptocurrencies, had previously been the main targets of crypto cyberheists.

Tokyo-based exchange Mt.Gox for instance collapsed in 2014 after it lost half a billion dollars in hacks. Coincheck, also based in Tokyo, was hit by a $530 million heist in 2018.

Many major exchanges, under the regulatory spotlight and striving to attract mainstream investors, have since bolstered security and heists on such scale are now relatively rare.

Less Secure
An onus on security at major platforms such as Coinbase Global Inc. has pushed less-secure venues to the sidelines, said Ross Middleton, chief financial officer at DeFi platform DeversiFi.

“What’s happened is the big exchanges have got really good (on security) and the smaller exchanges aren’t around anymore,” he said. “The frontier is definitely DeFi now.”

Losses from crime at DeFi platforms are at an all-time high, crypto intelligence firm CipherTrace said last week, with thieves, hackers and fraudsters making off with $474 million from January through July.

The spike came as funds poured into DeFi, mirroring flows into crypto as a whole. According to DeFi Pulse the total value held at such sites is now more than $80 billion, compared with just $6 billion a year earlier.

DeFi specialists say security risks tend to lie at newer sites which may run on less secure code.

“There is a widening security and risk gap between old, battle-tested DeFi protocols, and new, untested DeFi protocols,” said Rune Christensen, former head of the body behind high-profile DeFi application Maker.

Proponents says the use of open-source code means vulnerabilities can be quickly identified and solved by users, reducing the risk of crime. DeFi can police itself, they say.

Yet for financial watchdogs and governments across the world looking at regulating the crypto sector, DeFi is increasingly in focus.

Enforcement Action
US Securities and Exchange Commission (SEC) chair Gary Gensler has signalled he would take a tough stance on DeFi. Such platforms may be captured by US securities laws, he said in a speech this month, calling on Congress to draft legislation to rein in DeFi and crypto trading.

The SEC this month brought its first enforcement action involving DeFi tech, alleging the company issued unregistered securities and misled investors. The SEC did not respond to further questions on its stance.

Officials at the US Commodity Futures Trading Commission have also signalled greater scrutiny.

Commissioner Dan Berkovitz in June called DeFi a “Hobbesian marketplace”—a reference to a 17th century philosopher who saw life without government as “nasty, brutish and short”. Unlicensed DeFi platforms for derivatives were violating commodities trading laws, he suggested.

Elsewhere, moves are slower. DeFi is still far from the political agenda in Britain, for instance.

A spokesperson for Britain’s financial watchdog said while some DeFi activities may fall under its scope, much of the sector is unregulated.

For some analysts, greater regulation in inevitable, with little sign that DeFi sites can do the job themselves. “The unfortunate situation is that (Poly Network) was seen as just an average Tuesday in the DeFi world,” said Tim Swanson of blockchain firm Clearmatics. “The industry likes to congratulate itself by claiming it resides on transparent systems, but it has repeatedly shown it is incapable of policing itself.”

Reuters’ Michelle Price in Washington and Gertrude Chavez-Dreyfuss in New York contributed to this story.



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London court orders Binance to trace cryptocurrency hackers, BFSI News, ET BFSI

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LONDON -London’s High Court has ordered Binance, one of the world’s largest cryptocurrency exchanges, to identify hackers and freeze their accounts after one user said it was the victim of a $2.6 million hack.

In a judgment made public this week, a High Court judge granted requests by artificial intelligence (AI) company Fetch.ai for Binance to take steps to identify the hackers and track and seize the assets.

While involving a relatively small sum, the case is one of the first public ones involving Binance and will be a test of the English court system’s ability to tackle fraud on cryptocurrency platforms.

“We can confirm that we are helping Fetch.ai in the recovery of assets,” a Binance spokesperson said.

“Binance routinely freezes accounts that are identified as having suspicious activity occurring in line with our security policies and commitment to ensuring that users are protected while using our platform.”

Binance, which has an opaque corporate structure, has faced intense regulatory scrutiny amid a worldwide crackdown on cryptocurrencies over concerns that such exchanges could be used for money laundering or to allow consumers to fall victim to scams or runaway bets.

Binance has said it is committed to complying with appropriate local rules wherever it operates and has expanded its international compliance team and advisory board.

“We need to dispel the myth that cryptoassets are anonymous. The reality is that with the right rules and applications they can be tracked, traced and recovered,” Syedur Rahman, a partner at Rahman Ravelli, which is representing Fetch.ai, told Reuters.

Fetch.ai, which is incorporated in England and Singapore and develops AI projects for blockchain databases, alleges fraudsters hacked their way into its cryptocurrency accounts on the Binance exchange on June 6.

Unable to remove the assets because of account restrictions, they allegedly sold them to a linked third party at a fraction of their value in under an hour.

Rahman said Binance, which had notified Fetch.ai of unusual activity in its account, had already frozen a sum and had indicated it would comply with the orders. The claimants will have to prove they are victims of fraud before seeking a recovery order.

“We have been working closely with Binance and local enforcement to obtain details about the hacker,” Fetch.ai said in an emailed statement. “Issuing a court order for the release of this information is a standard process.”

(Reporting by Kirstin RidleyEditing by Mark Potter and Richard Chang)



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Hold crypto assets? Here’s how you are going to pay income-tax on it, BFSI News, ET BFSI

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A cryptocurrency is a decentralised digital asset and a medium of exchange. Bitcoin was the world’s first crypto currency launched in 2009. It was created by a software developer under the pseudonym Satoshi Nakamoto. Based on blockchain technology, over 1,500 virtual currencies such as Litecoin, Ripple, Ethereum and Dogecoin are being actively used and traded globally today.

The cryptocurrency space in India has been subject to significant regulatory challenges. It started with a circular issued by the Reserve Bank of India on 6th April 2018, which restricted banking facilities from being offered to participants involved in cryptocurrency transactions. In March 2020, the Supreme Court set aside the RBI circular, on constitutional grounds and affirmed the virtual currency exchanges’ fundamental right to trade. It is estimated that around 5 million traders in India traded across 24 exchanges, with trading volumes in the range of 1,500 Bitcoins a day translating to a volume of Rs 1 billion. According to moneycontrol.com, the trading volume of cryptocurrency in India increased by 400 percent during the nationwide lockdown.

On 24th March, 2021, in what could possibly mark the first move by the government to regulate cryptocurrencies and related transactions in India, the Ministry of Corporate Affairs has made it mandatory for companies dealing with virtual currencies to disclose profit or loss incurred on crypto transactions and the amount of crypto currency they hold in their balance sheets at the reporting date. These amendments were made in schedule III of the Companies Act with effect from April 1, 2021.

The Indian income tax law is still unclear regarding the tax impact on the gains earned from cryptocurrencies. It is worthwhile to note that India’s tax authorities have not yet categorized returns from cryptocurrencies under any specific bracket and there have been no judicial precedents in this regard.

To understand the taxability of the cryptocurrencies, one should examine the classification of cryptocurrency i.e. is it currency or goods/property?

How are tax cryptocurrency transactions in other countries?
USA: The Internal Revenue Service in 2014 decided cryptocurrencies should be treated as “property”, meaning they should be taxed as capital assets other than in situations when cryptos are earned from mining activities.

Singapore: Businesses that trade virtual currencies in the course of their business are taxed on profits as business income. Entities holding cryptocurrencies for long-term investment purposes are not taxed as there is no capital gains tax in Singapore.

UK: If a person buys and sells crypto assets with such frequency, level of organisation and sophistication that the activity amounts to a financial trade, then it will be taxed as trading profit/losses, else it will be subject to capital gains tax.

Taxation of cryptocurrency transactions in India
If cryptocurrency is to be classified as currency, then the said transaction will not be exigible to taxation under the Income Tax Act, 1961 (“ITA”). Cryptocurrencies are not recognized as currency by the RBI and the word ‘income’ as defined under section 2(24) of the ITA provides an inclusive list not covering ‘money’ or ‘currency’. On the other hand, if cryptocurrency is considered as property/goods, then it would fall under the heads of either ‘Capital Gains’ or ‘Profit and Gains from Business or Profession’.

The fact that crypto currency gains will be taxed is now certain with the Minister of State for Finance, Mr. Anurag Singh Thakur clarifying on 28th March 2021 that “the gains resulting from the transfer of cryptocurrencies / assets are subject to tax under a head of income, depending upon the nature of holding of the same”.

Thus, it is settled that cryptocurrencies will not be treated as currency by India and will be exigible to tax. The key issue is whether income from virtual currency is treated as capital gains or business income. If a seller is a trader by occupation, the income should be taxed as business income. If it is not business income, such income would be taxed in the nature of capital gains.

Taxability under ‘Capital Gains’
Crypto currency can be deemed to be a capital asset if it is purchased for the purpose of investment by a taxpayer. As per Section 2(14) of the ITA, a capital asset means a property of any kind held by a person, whether or not connected with his business or profession. The term ‘property’, though has no statutory meaning, yet it signifies every possible interest which a person can acquire, hold or enjoy. Therefore, any gain arising out of the transfer of cryptocurrency may be considered as capital gains, if it is held for investment.

Infrequent crypto transactions could be treated as long or short-term capital gains, depending on the holding period. If investors hold cryptocurrencies for 36 months or more, the gains would be taxable as long-term capital gains, and if less than 36 months, it would be short-term capital gains. Short-term capital gains are taxable as per the slab rates applicable to a taxpayer. And long-term capital gains are taxed at the flat rate of 20% with the benefit of indexation.

Taxability under ‘Profit and Gains from Business or Profession’:
However, if the transactions are substantial and frequent, it could be held that the taxpayer is trading in cryptocurrencies and any profits thereon would be taxable as business income. Similarly, if cryptocurrencies are held as ‘stock in trade’, then income arising therefrom will attract tax under business income. Therefore, the continuous activity of trading in cryptocurrencies and profits realized will be taxable as business income. Although a position can be taken by the revenue authorities that such trading is treated as speculation income which would adversely impact taxpayers.

In conclusion, virtual currencies can boost India’s digital infrastructure and reduce banks’ infrastructure costs attributable to cross-border payments, securities trading and regulatory compliance. We still need clarity from the government on cryptocurrency taxation, particularly on issues such as treatment of capital gains or business income, classification as speculative income, allowability of set-off, and carry-forward of losses, and applicability of deemed gift tax provisions.

(The author, Harsh Bhuta, is a Partner at Bhuta Shah and Co LLP. The views are his own)



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CoinDCX raises $90-m funding led by Facebook co-founder’s B Capital

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CoinDCX, on Tuesday, announced it has raised $90 million (₹670 crore) in a Series C round led by Facebook co-founder Eduardo Saverin’s B Capital Group. The latest round surged the cryptocurrency exchange’s valuation to $1.1 billion, making it the first Indian cryptocurrency start-up to attain the unicorn status. Returning investors Coinbase Ventures, Polychain Capital, Block.one, Jump Capital among others also participated in the round.

Hiring new talent

The fresh capital raised will be utilised to spread awareness on cryptocurrency across the country and hiring new talent to expand and strengthen its team.

“We are actively hiring for various roles that include developers, customer success professionals, security analysts, and marketing, sales & growth professionals to support the growing business. Currently, we are 185 employees in strength and will soon be reaching the 200-mark. Our aim is to increase our employee strength to 300 by this year-end,” Sumit Gupta, Co-founder and CEO, CoinDCX, told BusinessLine.

“Apart from this, we will be joining hands with key fintech players to expand crypto investor-base, set up a research & development facility, strengthening the policy conversations through public discourse, working with the government to introduce favourable regulations, education, and ramping up the hiring initiatives. But those discussions are at early stages currently,” he added.

Additionally, CoinDCX will be building next generation products with cutting edge innovation, by improving its existing product array while strengthening its product team. In the coming months, CoinDCX will also be launching the CoinDCX Prime initiative, its latest offering in the HNI & Enterprise space, providing legally vetted and safe investments, as well as Cosmex, CoinDCX’s global trading product. Founded in 2018, CoinDCX, at present, has over 3.5 million users.

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‘Ethereum Improvement Proposal’ all set to bring major change to crypto world

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Ethereum 2.0’s latest upgrade could make it outperform Bitcoins. Known as Ethereum Improvement Proposal (EIP)-1559, which went live on Thursday, is touted to be the most significant update since the launch of the cryptocurrency.

The upgrade will not only help reduce cost of transaction fees involved on Ethereum network but introduce several other fundamental changes to how Ethereum is perceived. Industry players said with the current updates, Ether stands a chance to outperform Bitcoins.

Key changes

Known as the second most valued cryptocurrency, two of the key changes the update will bring include settling on a fixed base fee instead of an uncertain ‘gas fee’ users pay in ether to miners to process their transactions over the Ethereum network.

This transaction fee tends to increase and change and there is no way the user will know the price before hand. This will be replaced with a fixed ‘base fee’. Over this base fee, the user can choose to pay a tip to speed up the process.

Also read: Ethereum co-founder says safety concern has him quitting crypto

‘Burning’ feature

The other key update is introducing the “burning” feature wherein after each transaction with the miner, a small amount of those tokens would be burned or taken away permanently out of circulation. This will lead to creating a shortage of ether supply in the network leading to increasing value and demand as it becomes rarer.

Additionally, the number of transactions allowed on one block has been doubled. Ethereum’s blockchain settles transactions in blocks or batches. Each block needs to have a certain fixed number of transactions registered to be completed and taken for settlement.

Siddharth Menon, COO WazirX told BusinessLine, “This EIP-1559 is a major overhaul in the fee model. One of the biggest challenges in the current fee model, which is bid based. There was high volatility in gas fees to be paid, which often resulted in transactions taking long to get confirmed or not even getting confirmed. With this new model, the increase or decrease of fee will be more linear and predictable and less volatile thereby enhancing user experience.”

Also read: India must take a holistic view on cryptos

“Ethereum so far has been an inflationary economy which inflated at the rate of approx 2 per cent per year. With this new fee model, Ethereum theoretically can become both inflationary and deflationary, however, practically I believe as there is more adoption in this network, it will be primarily a deflationary economy where supply will always be burned to remain lesser than demand. This could be a great opportunity for long term investors. If more people understand this economics, we could see more volume and price movement for Ethereum,” he added.

Ethereum to outperform Bitcoin

“The upgrade to Ethereum 2.0 will certainly make it more environmentally friendly than the current leader, Bitcoin. Also, the use of block in decentralised finance and its applications will hopefully support Ether’s price movements in the years to come,” Neeraj Khandelwal, co-founder, CoinDCX told BusinessLine.

“Bitcoin is seen as a store of value just like Gold. However, Ethereum has a lot more use cases and adoption led by DeFi, NFT and other Dapps being built on top of Ethereum. This adoption essentially means more demand for Ethereum which will eventually lead Ethereum to outperform Bitcoin. Ethereum Network also called EVM (Ethereum Virtual Machine) is like cloud computing using the Blockchain, and can be compared to Unix servers powering Facebook, Google and other platforms. This is the potential of where Ethereum can go and what the future tech businesses built on Ethereum could look like,” Menon said.

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Malaysia regulator takes enforcement action against Binance, BFSI News, ET BFSI

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Malaysia has taken enforcement action against cryptocurrency platform Binance to stop it operating in the country, the Securities Commission said on Friday.

The Commission said it had issued a public reprimand against Binance Holdings Limited, its CEO Zhao Changpeng and three other entities registered in the United Kingdom, Lithuania and Singapore, for continuing to operate in Malaysia despite being added to the regulator‘s investor alert list a year ago.

The regulator ordered Binance to disable its website and mobile applications, cease media and marketing activities, as well as restrict Malaysian investors from accessing its Telegram group.

“Those who currently have accounts with Binance are strongly urged to immediately cease trading through its platforms and to withdraw all their investments immediately,” it said.

Binance said on Friday it would wind down its futures and derivatives products offerings across Europe as the platform faces growing pressure from regulators across the world.

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Next stop $50,000 or $150,000?, BFSI News, ET BFSI

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New Delhi: While equity investors are nervous about weak market sentiments, crypto investors are cheering the recent rally in the digital token market.

Bitcoin and ace digital tokens have gained as much as 30 per cent in the last seven days. The cryptocurrency hit the $40,000 mark on Wednesday and investors have set their eyes on $50,000 as the next target.

Analysts have varied opinions on Bitcoin and other digital tokens. However, they say investors should not fall prey to market cycles. Their long-term bullish view remains intact.

“If you believe in the Internet with its own money and governance, then the industry is just getting started,” said Siddharth Menon, COO, Wazir X. “Bitcoin could play a significant role as adoption goes up. Many institutional investors are getting greedy.”

However, they also have a word of caution for the new age investor.

Edul Patel, CEO & Co-founder, Mudrex, advises crypto investors be prudent in differentiating greed and fear in the financial markets.

“The recent rally has lured several inexperienced retail investors and traders into the markets, who have joined the frenzy to make a quick buck. However, they may get trapped if the larger players keep dumping,” he cautioned.

Market watchers are worried over the sustainability of this bull market. The crypto market is on a roll, despite weaker volumes. This suggests the party may get over soon, said market watchers.

There are multiple halts after a quick rally. Patel of Mudrex is advising investors to be extra-cautious in such markets and keenly track the volumes for further upside.

However, healthy corrections are good for the market as they give investors a decent opportunity to enter the markets. Bitcoin rose to $40,700 from $29,600 in just 10 days. Investors are now expecting $50,000 level, which is further 20 per cent up from current levels.

“The brief halt was more of market cycle correction after having a month-on-month bull run since March 2020. The $50,000 level could be a local top in a few months, but in a longer time period, the sky’s the limit,” said Menon.

Several analysts have predicted that Bitcoin could hit the $150,000 mark by 2022. However, Bitcoin is trading about 35-40 per cent down from its all-time high of $64,865.

“There are certain significant upgrades in the pipeline for both Bitcoin and Ethereum. These are expected to roll out by the end of this year, which can be game changer of the top crypto tokens,” said Patel of Mudrex.

Changpeng Zhao, CEO, Binance, is bullish on Bitcoin in the long run as a store of value and its potential to change the world for the better.



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