The most prominent cryptocurrency – bitcoin has witnessed a spectacular rally in the last 12 months, with its value going up by over 80 per cent during the period.
Leading bank ICICI Bank already announced blockchain application for transactions with few groups.
The most prominent cryptocurrency – bitcoin has witnessed a spectacular rally in the last 12 months, with its value going up by over 80 per cent during the period. With the digital currency moving close to the December 2017 high of $20,000, analysts predict that bitcoin would climb to a new all-time high level this year.
Globally the price this year has been driven more by institutional buying in the US than retail buying across the world. But it is yet to be experienced; is it an early phase or at the peak?
“There are a number of factors that have led to an increase in demand for Bitcoin. The global pandemic has been the biggest driver as it has led to people trying to find new ways to earn online. This is where they come across crypto, and of course, Bitcoin. It’s a global asset, and anyone can invest in it while sitting in any part of the world. This has given a major boost to global crypto adoption,” said Nischal Shetty, CEO, WazirX.
“We’re also seeing a lot of institutional investors, and hedge funds in the US, and large companies like Square entering in crypto. These companies participate in crypto by either buying them or offering them to their users. PayPal entry into crypto has been the biggest news recently. This has also given a push to Bitcoin adoption,” he added.
“So, the pandemic which leading to retail participation, and the institutional participation converging together, and the fact that crypto has been growing consistently month on month in the past 8-9 months have culminated into what we’re seeing now. There’s large demand and less supply because a large number of people are holding large amounts of Bitcoin and not selling it,” Shetty further said.
Talking on how different the investment in cryptocurrency is from other investments, Shetty said, “When we look at equity, it’s the performance of a company that matters. Bitcoin is a digital asset which is not limited to any country, or entity, but available to anyone around the globe. So you can buy any quantity of it.”
“Due to this, Indians now have the option to invest in equity or digital asset like Bitcoin,” Shetty added
Talking on the relevance of the bull run, he said, “Most people you see would actually like to have Bitcoin in their portfolio because it’s a future asset. Looking at the past 10 years, Bitcoin adoption has been growing year on year. Every year, we see more number of people holding Bitcoin. This means that its value will go up because more people will hold it in future. As a smart investor, people in India want exposure to crypto currency based on their risk appetite and have diversity in portfolio.”