The price of Bitcoin fell to a five-month low of $38,000 on Friday morning and the total market capitalisation of all cryptocurrencies is now below $2 trillion. The latest drop was said to be a result of a proposed ban on cryptocurrencies in Russia and the fall in the US stock markets.
Unlike in previous dips, during which Indian buyers were inclined to buy, there was caution amongst crypto investors and traders and thus less action than usual on crypto exchanges, according to industry trackers.
“The buy intensity is definitely lower than the last several months. But this has less to do with India and more to do with global crypto sentiment. The global crypto sentiment isn’t negative. It’s cautious and investors are waiting to understand what direction the market will take in the coming weeks,” said Nischal Shetty, cofounder of WazirX. “Indian investors are cautious. They’re taking a wait-and-watch approach. We’re seeing a lot more research being done now compared to a few months ago.”
In India,
news of a crackdown on crypto exchanges for alleged tax evasion, and the
possibility of tax clarity in the upcoming budget session of Parliament has added to the uncertainty. For some, the initial excitement to get rich quickly has worn off, and they are now more wary of “buying the dip” than they were before.
“You should only invest money you are willing to lose. After studying the technicals for a year, I have understood that you can’t rely on crypto as a legitimate investment. Crypto seems to be based purely on demand and supply and lacks any fundamental backing,” said 20-year-old Mrityunjaya Lala, who has been a crypto and stock market investor for two years. Lala, who has invested in several cryptocurrencies, added that he too was cautious about buying the dip this time.
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