Keep or Sell: What should cryptocurrency investors do amid uncertainty?

By: |
February 18, 2021 5:50 PM

In case of an outright ban, investors may not be able to use any bank account in India to deposit the sale proceeds after liquidation of the cryptocurrencies.

Bitcoin, cryptocurrency, Tesla, MasterCard, Paypal, Microstrategy, Cryptocurrency and Regulation of Official Digital Currency Bill, cryptocurrency ban, Ethereum, Doge, Amazon, Apple, WalmartThe Reserve Bank of India had sometime back banned the crypto transactions in India.

Bitcoin – the oldest cryptocurrency that was launched in 2009 – had touched the level of $1 in 2011, and after 10 years in 2021, it has touched the $50,000 level, giving a compound annual growth rate (CAGR) of over 195 per cent for investors over the last 10 years.

However, with the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 scheduled to be presented in Parliament in the current Budget session, the cryptocurrency investors in India are in a dilemma whether they should continue to hold their cryptocurrency assets or liquidate their holdings.

This is because the Reserve Bank of India (RBI) had sometime back banned the crypto transactions in India. The decision was later overturned by the Supreme Court of India. The fear, however, is that the new bill would bring a legislation to ban it again.

In case of an outright ban, investors may not be able to use any bank account in India to deposit the sale proceeds after liquidation of the cryptocurrencies.

However, while the acceptance of cryptocurrencies is growing with the acceptance by institutes like Tesla, MasterCard, Paypal, Microstrategy etc, it is doubtful if the bill would put a blanket ban on it.

Bitcoin crosses $50,000 level, but what’s the future of cryptocurrencies in India?

In fact, according to a recent survey – named “Consumer Sentiment On Bitcoin As A Payment Method” – conducted in the US by DealAid.org, 60.2 per cent of the consumers participated in the survey said they would like more companies – Amazon, Apple and Walmart are the top 3 companies – to accept Bitcoin as a payment method.

The survey also revealed that 50.5 per cent of the consumers participated are willing to pay for products and services with Bitcoin, while Ethereum and Doge are the most popular alternatives to Bitcoin as a payment method in the US.

“Compared to the US and other countries, India has lesser institutional participation in crypto, due to regulatory uncertainty,” said Nischal Shetty, CEO, WazirX.

“We don’t know the contents of the bill. However, I’m optimistic that our leaders will at least discuss with industry participants like us to understand the ground realities of Crypto before going ahead with any bill around this technology,” he said.

So, what should the customer do – should they sell or keep?

“As of now, there is no crypto regulation in India. Buying Bitcoin is absolutely legal in India, there is no law prohibiting Indians from buying/selling cryptocurrencies in India. There’s no reason for users to panic right now,” said Shetty.

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