Bitcoin is the first and the largest cryptocurrency in the world. The current market capitalization of bitcoin is approximately $667 billion. On 21st January’22, bitcoin dropped below the psychologically important level of support of $40,000. A massive sell-off of more than 10 percent brought about a domino effect in the top 100 cryptocurrencies which are all trading in the red. The second-biggest cryptocurrency, Ethereum with a market capitalization of $290 billion, has also fallen below its $3,000 support level. The slump continues to deepen as the entire cryptocurrency market goes through a massive sell-off. By now you must be wondering WHY?... So here it is, The Russian Central bank on Thursday proposed a ban on the use and mining of cryptocurrency in the Russian Territory. The reasons cited for this proposal were concerns about financial stability, financial safety of citizens, and the sovereignty of the monetary policy. Russia has been against the use of cryptocurrencies for years due to the emerging threats of terror financing. Although cryptocurrencies got a legal status in 2020, the use of token coins as a payment method was banned. Several other macroeconomic factors have impacted this slump. The Federal Reserve and most other central banks have been consistently taking a hawkish stance to control inflation. The rising interest rates have reduced the appeal for digital assets and the equities of tech companies. The cautious investors are looking for a safe haven and reduce their exposure to volatile asset classes. Bitcoin reached its peak in November and since its peak, it has wiped out more than $600 billion of its market value. Indeed, it’s a huge dip; however, Indian investors who are more likely to buy the dip, are reluctant due to increased caution amongst crypto investors and traders. As much as blockchain technology is a boon to the world, there are underlying negative impacts of cryptocurrencies. Financial instability, exposure to cyber-attacks, terror financing, and environmental impacts due to mining are major reasons why countries like Russia, China, Bangladesh, Egypt, and several others have banned cryptocurrency. Many countries, including India, are making legislation pertaining to crypto and its regulation. Let us see how cryptocurrency, one of the most hyped asset classes does in the coming years… Meanwhile, comment below your views on ban on cryptocurrency... Thank you.
Well articulated! Hritika
ReplyDeleteIn my opinion buying of crypto as in form of assets will be agreeable but using it for exchange can cause financial instability and terror attacks.
Thank You Akash!
DeleteI think If proper regulations are put on currency exchange then the negative outcomes will be minimised
Really well written!
ReplyDeleteI think Cryptocurrencies should not be banned. They are a technology that is prospering, there should be regulations and guidelines for the same. The environmental impact is expected to go down as when currencies evolve.
Thank You Ankur!
DeleteI agree with you. To add on, more sustainable cryptocurrencies should be introduced.
Very well articulated Hritika!
ReplyDeleteThank You!
DeleteVery well articulated Hritika!
ReplyDeleteBlockchain technology is the future and I hope banning Cryptocurrencies is not the solution.
Thank You!
DeleteI agree with you.
Very well explained!
ReplyDeleteI think bitcoin must not be banned as it is the future for us.
Thank You Deepali!
DeleteTrue that..
Very well conveyed
ReplyDeleteThank You Shraddha
DeleteCrypto has reasons to thrive and one amongst them is the establishment of Metaverse
ReplyDeleteA good point established there! I agree with you
DeleteVery Well Written!
ReplyDeleteThank You Janvi!
DeleteWell explained...
ReplyDeleteI think there is some possibility that cryptocurrency might get banned in India but on the flip side, there was some fuss about India making its own cryptocurrency or something of that sort. Well on a global basis, while some countries would continue banning it, but nations like US would bring in friendly regulations for the same as their federal systems seem to praise the technology and plan on using it to boost their infrastructure in the future. If this happens, then this would be the current emulation of how people invest in the NYSE unless the Indian government criminalises mining or ownership of cryptocurrency by individuals.
Thank You Pranay!
DeleteThat was a great insight. I think regulations would bring in some financial stability and minimise the misuse of cryptocurrency. But whole point of inventing the digital currency will be in vain. It will be fascinating to see how cryptocurrency evolves in years to come. Until then, Happy Reading!
Very well written Hritika, in my opinion crypt currency shouldn't be banned, it should be regulated!!
ReplyDeleteThank You!
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ReplyDelete