Investors panic as crypto bill appears
Prices crash by 20% as investors rush to sell.
John Sarkar and Aseem Gujar
Indian crypto investors resorted to panic selling after the government listed a bill last week seeking to ban private cryptocurrencies, while allowing an official digital currency by the RBI. Cryptocurrency prices in the Indian—linked to rupee—market crashed by up to 20% before recovering after exchanges allayed investors’ fears.
“On Tuesday night, we saw huge selling in the rupee (INR-crypto) market on WazirX. We saw a 15-20% crash in prices once investors engaged in panic selling. However, the market is showing recovery and is at a 3-4% discount currently. A similar knee-jerk reaction was seen in January, when the contents of the bill were disclosed,” said WazirX CEO Nischal Shetty.
“There is fear among Indian crypto investors, especially the ones who entered recently. However, we advise people to pay attention to the winter session and derive conclusions based on it. The ban reports could turn out to be speculative,” crypto exchange BuyUcoin’s CEO Shivam Thakral said. The price of bitcoin was down 10% against the rupee at ₹40 lakh on Wednesday evening (the crypto market is open 24/7).
Cryptocurrency exchange founders on Wednesday assured nervous investors that their digital assets are secure even as they welcomed the proposed bill to regulate virtual currencies. They said the government’s announcement is a positive step. A well-defined framework will put a tight check on unregulated crypto markets.
The bill, which seeks to safeguard small investors by treating cryptocurrency as a financial asset, has major ramifications for the industry that is still unregulated. A description of the bill showed that it aims to prohibit all private cryptocurrencies except “certain exceptions to promote the underlying technology of cryptocurrency and uses”.