Bitcoin markets are reacting to fresh regulatory comments on crypto from India’s finance minister Arun Jaitley, made during his most recent budget speech in the Parliament today, Feb.1.
Indian finance minister Arun Jaitley has promised a crackdown on the use of cryptocurrencies such as bitcoin for illicit purposes, stressing the government does not consider them to be legal tender. Pretty standard you would believe. Is that not what other governments have also said in the last few years including India.
However, his speech was followed by a flood of misinterpreted comments warning of an outright ban across the mainstream press and social media. Markets in turn fell in trading on Thursday, losing on an average 20% of their value. January hasn't been kind to the crypto enthusiasts and any negative news drives emotions making the novice traders act in a hurry triggering a widespread collapse.
India has been sporadic in its attempts to formalize cryptocurrency regulation over the past two years. Since the country’s currency reforms, interest in Bitcoin especially has skyrocketed, with local exchanges reporting huge growth.
At the same time, India’s central bank has issued repeated warnings on cryptocurrency investment, some of which appeared tantamount to calling it illegal.
While Jaitley’s speech noticeably avoided any mention of legality of crypto in and of itself, media journalists controversially claimed that a ban was imminent.
Social media fuelled the fire and soon the news caught on leading to the frenzy on the india based exchanges with currencies losing upto half their values before clawing their way back. The bearish tone set was difficult to overturn in a market which was already bearish and it led to selling in the other markets too, driving the prices lower.
However, the crypto community is still buoyant and have thrown their weight behind blockchain. The dip is also an opportunity to enter the market at a level which provides an opportunity to buyers to make good profits.
Some of the cryptocurrencies which are dirt cheap at today's prices and represent moderate risks are ADA, XRP, ETH and XLM. Bitcoin although is the oldest and largest crypto, is plagued by problems and an absence of a valid business use case which would make it widely useable.
Hoping that February, brings a smile to the cryptocurrency world.
To close, I would advice you guys that Avoid FUD, Beware of FOMO and HODL until the sun shines bright again.
Disclaimer: Cryptocurrencies are a risky investment and you should do your own research before investing.