Will bitcoin, ether and other crypto become attractive to investors again?
Sometimes no bad news is also seen as good news. While the past year witnessed a number of setbacks for cryptocurrencies including 30 percent capital gains tax, the new year ushers in positivity and hope for crypto investors.
Incidentally, there was no negative comment about digital currencies in the 2023 budget and their prices have also witnessed a significant jump in the last couple of months.
A report by Reuterswhile relying on the options trading data, they claim that bitcoin and ether have recovered noticeably in recent times.
The report says that the total volume of bitcoin and ethereum options jumped significantly on Deribit in January compared to the previous month.
Over the past three months, bitcoin prices have rallied more than 25 percent to reach $23,193 on Wednesday at 8:50 GMT. At the same time, the total market value of crypto-tokens again passed 1 trillion dollars, shows CoinMarketCap data.
Even the second most popular cryptocurrency Ethereum recovered 52 percent from $1,100 on November 9 to hover around $1,671 on Wednesday. CoinMarketCap data shows.
Ether has reported a 52 percent increase over the past three months, CoinMarketCap data shows.
Binance Coin also witnessed a 23.7 percent jump in price over the past three months from $266.85 on November 9 to $330 on Wednesday.
Other crypto tokens have also traded higher than their previous close.
Ripple is trading at $0.399 at 9am GMT, almost one percent higher than its previous close, Aptos is up 3.14 percent to trade at $15.77, Cardano is up 2.59 percent to trade at $0.397 and dogecoin is trading 0.38% higher on Wednesday to trade at $0.09.
Polygon rose 4.45 percent in the past 24 hours to trade at $1.28 and Solana rose 1.4 percent to trade around $23.64 on Wednesday.
Back to business
WazirX, which had previously stopped accepting new cash deposits on its platform, has resumed accepting them, as confirmed by an email sent to customers on January 27.
However, the deposits can only be made by investors via RTGS, NEFT or IMPS and not via UPI.
During the time when new cash deposits were blocked, the crypto platform provided the possibility of peer-to-peer trading to investors where they could transfer money directly to the potential seller.
When investors deposit money into their accounts, the P2P trading option will automatically be disabled, reads the email referenced above.
Ashish Singhal, co-founder and CEO, CoinSwitch, says the massive jump in crypto prices has led to a 3x increase in weekly investment activity since January.
“The crypto market has picked up significantly since the turn of the year, with Bitcoin rising nearly 40% and other coins even more. Now, retail investment behavior, in both traditional and crypto markets, is momentum-based – investing more when prices rise, and less when they fall. As such, we have witnessed an increase in weekly investment activity since January – over 3X and this trend has continued through the Budget week, so it is not correct to attribute this activity to the Budget alone,” said Singhal.
However, Gaurav Mehta, founder of Catax – Simple Crypto Taxes, believes that the overall outlook for cryptocurrencies remains bleak and there is no favorable climate for retail investors.
“The absence of negative news in the Budget should not be interpreted as a signal to buy despite the current bull run, especially for retail investors, given the regulatory uncertainty around cryptocurrencies and the absence of coverage in the Budget. The industry has spoken out against 1% TDS, 30% tax and inability to deduct losses, but the government has continued with implemented policies, Mehta said.
Sidharth Sogani, Founder and CEO, CREBACO, believes the environment for cryptocurrencies is still quite bleak in India, with most exchanges on the verge of shutting down operations.
“Volumes have fallen by 97%. One of the largest stock exchanges in India is struggling with international exchange. No new money is coming in and liquidity in INR order book is drying up. Government must regulate or the industry in India will see the end soon,” said Sogani.
Total number of bitcoins
