Bitcoin falls after weekend record high as India considers a ban

Bitcoin falls after weekend record high as India considers a ban

News: Bitcoin falls after weekend record high as India considers a ban.

TOKYO / LONDON / NEW YORK (Reuters) – Bitcoin fell from a record high of over $ 60,000 over the weekend on Monday as investors digested a potential ban on cryptocurrencies from India.

The cryptocurrency hit a record high of $ 61,781.83 on Saturday after President Joe Biden approved his $ 1.9 trillion fiscal stimulus and ordered vaccinations to be accelerated.

With some investors looking at Bitcoin more as a hedge against inflation, analysts believe Bitcoin’s surge was helped by prospects of a steep economic recovery.

In afternoon trading, Bitcoin fell 5.3% to $ 55,865.

A senior government official told Reuters overnight that India, Asia’s third largest economy, was preparing a bill that would criminalize the possession, issuance, mining, trading and transfer of crypto assets.

The bill was in line with India’s January government agenda that banned private virtual currencies like Bitcoin while creating a framework for its own official digital currency.

“The Indian government’s renewed interest in banning cryptocurrencies resulted in an initial drop from $ 60,000 to $ 56,000,” said John Wu, president of AVA Labs, an open source platform for building financial applications using blockchain technology.

In India, transaction volumes are rising despite government threats of a ban, with 8 million investors holding crypto investments of 100 billion rupees ($ 1.4 billion), according to industry estimates. No official data are available.

The world’s largest virtual currency hit $ 61,781.83 on Saturday, up more than 40% since late February as investors shook off concerns about sky-high valuations.

Despite Monday’s retreat, many investors believe the outlook for Bitcoin price continues to trend upward.

Seth Melamed, the Tokyo-based chief operating officer of Cryptocurrency Exchange Liquid, said laws like those proposed by India will not be an obstacle to further profits in Bitcoin.

“Because it is decentralized, government bans or acceptance are somewhat irrelevant,” Melamed said. “Capital will find a way.”

Bitcoin is up more than 90% this year, broadly outperforming traditional asset classes. This is being driven by the adoption of cryptocurrencies by established companies and major investors such as Tesla Inc and Bank of NY Mellon.

“The reason Bitcoin’s continued surge is such a surprise to the traditional financial market because it looks at its fundamentals as it looks at the market forces driving its adoption,” said Sergey Nazarov, co-founder of Chainlink, a decentralized company Financial market network that provides data for smart contracts in the blockchain.

“Bitcoin shares the same market dynamics as all fiat money, where market forces determine its value much more than any kind of clear fundamentals,” he added.

Bitcoin’s record on Saturday was due to the weekend in thin markets, with technical factors adding to the surge, said Justin d’Anethan, director of sales for digital asset company Diginex in Hong Kong.

Reporting by Kevin Buckland, Julien Ponthus, Gertrude Chavez-Dreyfuss, Sagarika Jaisinghani and Alun John; Editing by Jacqueline Wong, Nick Zieminski and Dan Grebler

Original Source © Reuters

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