In November of 2020, we witnessed Bitcoin approaching its all-time high of $20k in 2017 again. During this time span of 3 years, the majority of Indian investors who were either interested or keen to get into crypto were doubtful of the fact if cryptocurrencies were even legal in India. So first it is important to understand the legal status of Bitcoin and altcoins in the country before we jump on other things.
Legal Status Of Bitcoin & Other Cryptocurrencies in India
In 2018, RBI (Central Bank Of India) restricted all Banks in providing any service to cryptocurrency exchanges or entities/businesses dealing with cryptocurrencies. Along with that, it was said that Bitcoin is not legal tender in India. This step by RBI was criticized largely in the nation as it was irresponsible on the Central Bank’s part as not all investors can be expected to be aware of the jargons. This saw panic selling in Local Exchanges and retail investors liquidated their position in as low as half of the market price. This leaves us with our first principle of Investing In Bitcoin, Doing You Own Research, which we will discuss more in this article later.
Interpretation: Investors emphasized two major terms on RBI’s announcement – Bitcoin Not Being A Legal Tender & Restrictions Imposed On Entities Regulated By the RBI of not providing any services to cryptocurrency businesses. To this majority of people interpreted that bitcoin and cryptocurrencies are no longer legal in India. However, this wasn’t the truth.
Facts: Not only Bitcoin but even Gold & Property isn’t a legal tender in India. In India, there is only one legal tender and that is Indian Rupee (INR). Why is that? RBI doesn’t permit you legally to go to the shop and buy clothes using Gold. However, with an understanding of two peers, they can make trades. For example. B can Buy A’s painting In Exchange Of Some Gold, there’s no law forbidding it.
On the other hand, only banks were stopped in dealing. However, peers could buy and sell cryptocurrencies from each other using escrows. This gave birth to Peer-To-Peer exchanges in India and high volumes were seen.
The Blanket Ban Was Removed: In March of 2020, the Supreme Court Of India lifted RBI’s cruel blanket ban on banks to deal with cryptocurrency businesses. This gave way for exchanges to provide easy gateways for buying and selling of cryptocurrencies.
Crypto Boom 2020
Now that bitcoin and other altcoins are on a bull run, many new people will be charmed and will get into crypto. If you are in India and new to this space, you are the right audience for this paper. First of all, you should know why we are in this bull run, apart from the technical aspect of it. Bitcoin since its inception, until one decade, faced a lot of criticism especially from influential institutions like central banks across the globe, governments, big banks (including America’s Biggest Bank JP Morgan), etc. But now these institutions are realizing the actual potential and giving out bullish predictions. JP Morgan even launched their own cryptocurrency (stable-coin, pegged to USD), JPM Coin. In a note to investors, JP Morgan indicated that Bitcoin’s price could double or triple in the near future and that it’s good to include the cryptocurrency in their portfolio. One of Bloomberg’s analysts predicted Bitcoin’s price to be $100,000 by 2025, on the other hand, a Citibank’s executive predicted the price to be $300,000 by 2021 December.
Apart from these great institutions being so bullish, a widely used popular payments app PayPal launched cryptocurrency services for their United States’ account holders. All of this is now bringing mass attention to Bitcoin and other cryptocurrencies, especially from the mainstream audience.
Not only financial institutions and mainstream platforms are bullish, even writers at Forbes wrote on multiple occasions about how Bitcoin is a better hedge against inflation than Gold, providing the fact that there are not enough BTC so it’s bound to rise.
With so much positivity in the market, if Bitcoin manages to cross its 2017 All-Time-High of $20k, we’ll see a lot of more people, institutions, news channels talking about it. The more people will talk about it, the more newcomers will enter and Bitcoin’s price could potentially explode.
Things To Know Before Considering To Invest In Cryptocurrencies
- Never invest based on someone else’s advice. Always do your own research.
- Decide your goals, short term or long term. Remember, you can never buy at the lowest and sell at the highest, so it is important to make targets for taking profits and losses.
- Always invest that amount that you can afford to lose to avoid getting into a financial burden. Crypto markets are highly volatile.
- If you are getting into day trading, learn about Technical, Fundamental & On-Chain Analysis.
- Don’t fall for scams! There are a lot of frauds in the crypto space, no one is going to give you 2x-3x your money in a short span of time. Keep your funds to yourself and never send your money to any stranger on the internet.
Disclaimer: We’re not offering financial advice, rather a research paper. This research paper is for informational purposes only and does not constitute a recommendation or endorsement to buy or sell bitcoin, cryptocurrencies or any other financial instruments.