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Good news and bad: Bitcoin rockets past $7,000 for the first time, but India may shut it down

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Updated: November 2, 2017 6:57:43 PM

Bitcoin smashed through the $7,000 barrier on Thursday chalking about a sevenfold increase in its price this year despite threats of regulation and ban.

Bitcoin: Jamie Dimon still hates it; IMF backs it. And, Wikileaks makes 50,000% return on it (Image: Reuters)

Digital currency bitcoin has smashed $7,000 barrier for the first time ever on Thursday, chalking about a seven-fold increase in its price this year. That’s a good news for those who invested in Bitcoins, as they might be making crores, but there’s a bad news: India is planning a massive crackdown on cryptocurrency dealers in India. ET Now reported that a government panel has advised closing cryptocurrency dealers in India on the back of cyber risks.

The Bitcoin story so far…

While JP Morgan Chase CEO Jamie Dimon says Bitcoin is a great product for criminals, IMF chief Christine Lagarde backs the cryptocurrency by saying that it is a lot more than ponzi-like schemes. And, Wikileaks reports a 50,000% return on Bitcoin. Bitcoin — loved or hated — is certainly not meant to be ignored.

Jamie Dimon who has earlier called Bitcoin a fraud said that the governments around the world will “crush” bitcoin. “But what is the use case for bitcoin? You’re in Venezuela, North Korea, you’re a criminal. Great product,” Jamie Dimon said while speaking at a financial conference. But Christine Lagarde disagrees. She said it was important to look at the broader implications of technologies like digital currencies, CNBC reported. “I think we should just be aware of not categorizing anything that has to do with digital currencies in those speculation, ponzi-like schemes,” she said. “It’s a lot more than that as well.”

“I think that we are about to see massive disruptions,” Christine Lagarde told CNBC.

Meanwhile, Julian Assange, the founder of Wikileaks posted on micro-blogging site Twitter about the gains he made in the past seven years on Bitcoin. He thanked the US government for blocking WikiLeaks financially, which led his company to invest in Bitcoin.

Ban it, or regulate it!

While many might be witnessing turn of their fortunes by investing in Bitcoins, many governments are either planning to entirely ban it or regulate it. While China has already forced the Bitcoin exchanges to shut down, Russia’s central bank has said it would ban cryptocurrency websites. Meanwhile, India is planning to regulate Bitcoin.

In India too, Bitcoin has started gaining popularity. It surged on Indian exchanges from Rs 68,000 to Rs 2,95,000 so far this year, despite the Reserve Bank of India expressing caution against its use, Bitcoin now has a presence over five lakh Android devices and is adding more than 2,500 users every day. Bitcoin waded into the Indian market on a large scale post demonetisation on November 8 last year, in which Rs 500 and Rs 1,000 notes were scrapped, and the country reeled under shortage of cash in circulation.

While corporations and people are excited about the potential of Bitcoin, it is not thought to be secure against cyber-attacks. In June, after a ransomware attack on nuclear power stations and oil companies across Europe, America and Asia, including the Jawaharlal Nehru Port Trust, extortionists demanded ransom in Bitcoins to restore the operations.

Bitcoin, which is not regulated by any bank or central agencies, and with nobody knowing how it can be taxed, and without any underlying asset or value-base, remains a risky deal.

(The story was first published on October 16, 2017, on www.financialexpress.com)

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