Crypto: Crypto and High: Stocks, traders are coming for Trump

Mumbai: Waves crypto- the madness inside global markets They are acclimating the Indian coasts.

Average daily trading volumes on half a dozen major exchanges have increased 3x in less than a week, despite crippling taxes and shadow bans on most banks. Investors who had been waiting at a loss for about 18 months suddenly got money. Prices of some zombie coins, along with other cryptocurrencies, are following Bitcoin, which has reached a new high. And more local investors are booking profits rather than investing fresh money; This is as evidenced by the squeeze on the premium on stablecoin USDT, which acts as an intermediary when cryptocurrencies are sold to generate rupees.

Bitcoin, the most valuable cryptocurrency, was trading near $90,000 on Tuesday as Donald Trump vowed to make America the “crypto capital of the planet” and fueled hopes that the US Federal Reserve might at some point keep some of its reserves in the cryptocurrency. .

Bitcoin’s world market value of $1.7 trillion is estimated to exceed the global value of silver assets.

VOLUMES Still Below ’21 Peak
Crypto exchanges in India, which are awaiting a white paper on the sector from the government, are operating in a regulatory vacuum as the virtual digital asset (VDA) is neither considered a currency nor a security. Indeed, average volumes on exchanges on Tuesday were still around 60% lower than their 2021 peak, the result of a year-long rally triggered by the Supreme Court’s March 2020 judgment striking down the 2018 Reserve Bank of India (RBI) ruling. ) restricting banks from dealing with VDAs and facilitating VDA transactions.

Trading has fallen since 2022, with most high street banks unwilling to accept exchanges as customers, payment gateways closing their doors and the government imposing high taxes on trading and profits.

MOST WINNING POST FED, MICRO STRATEGY
That changed this week thanks to Mr. Trump’s stated position on cryptocurrencies. “With multiple catalysts, including Trump’s victory and MicroStrategy’s bold decision to invest up to $42 billion in Bitcoin over the next 3 years, we are clearly in a bull market. The Fed’s recent rate cut follows previous cuts , has created a more favorable environment for interest rates alternative assets… The bull market is also increasing the prices of altcoins and meme-focused coins,” said Sumit Gupta, co-founder of CoinDCX, one of the largest local crypto exchanges.

The last few days have given many small and wealthy investors a chance to make money. With USDT (or Tether, which acts as a proxy for the US dollar) priced at nearly the same level as the interbank USD-INR, it was clear that many investors were cashing out. Typically USDT (not easily available) is priced at a premium of 6/7% of the rupee-dollar exchange rate. However, as investors sold Bitcoin-USDT pairs, USDT was also sold to be converted into INR cash, causing the premium to disappear. This last happened in 2022, when investors panicked and sold after the bankruptcy of Bahamas-based exchange FTX. This week that was the result of profit booking in the midst of a dizzying rally.

“The next milestone will be $100,000 per BTC. Institutional inflows are increasing and the Bitcoin supply was halved at the beginning of this year. So while demand is rapidly increasing on one side, supply is decreasing on the other. Year-to-date, Bitcoin (BTC) is up 105.2% compared to the previous year.” made an impressive profit.

“The total market cap is now $1.78 trillion, surpassing silver in overall market value,” said Balaji Srihari, head of business at leading crypto platform CoinSwitch.

STOCK EXCHANGES ARE UNLOCKING THEIR FINGERS
Unlike stocks, investors can buy a small portion of the cryptocurrency. While Bitcoin is reaching a new peak, there is also interest in cryptocurrencies such as Ethereum, Cardano, Solana, Matic and Doge. “Both institutions and retailers are continuing this momentum. In the 2021 bull run, retailers entered the market a little late, but this time wallet addresses holding 0.001 BTC are increasing, indicating strong retail presence,” said Mudrex CEO Edul Patel.

The crypto story comes at a point when Indian VDA exchanges are keeping their fingers crossed. Even as they take security measures in the wake of the cyber heist on WazirX and hope that the euphoria in the US may do some damage to Indian policymakers too, they are not ignoring the calls of nervous bankers, splashing cold water on RBI officials. and the finance ministry is losing interest.