Bitcoin has had a history of tremendous highs and lows. In June of this year, it reached an all-time high of $14,000 per share. At this moment, Bitcoin encountered a significant obstacle and was unable to overcome it.
After that barrier was broken in June, Bitcoin’s price would have likely entered the bull market. However, it failed to do so and plunged to a low point of roughly $3,800, which was disappointing for Bitcoin bulls. You can check the bitcoin revolution to learn more about bitcoin trading.
The rising inflation of the US dollar is another factor in Bitcoin’s ascent. A 2 percent annual inflation rate has been the norm since the financial crisis, but current stimulus spending is on track to significantly raise inflation and reduce the buying power of the currency.
The United States has contributed $2.4 trillion to the economy as a result of the recent stimulus packages. Many fear that the dollar’s buying power will decline and inflation will grow as a result of this.
Many have fled from the dollar and sought refuge in assets that have traditionally held or even risen in value in order to protect themselves from this mounting inflation. To escape inflation or turbulent markets, consumers often change their dollars into assets that are scarce or less volatile in general. Some examples of these assets are precious metals, low-volatility stock, and most recently Bitcoin.
According to sources involved with the negotiations, India aims to tighten regulations on cryptocurrencies to discourage investors from keeping them, but the government is reluctant to accept through an earlier vow to prohibit private digital coins.
As an alternative, the government may only allow companies that have been pre-approved by the government to be listed and traded on exchanges.
In order to avoid a fine, holding or dealing in an unapproved currency is not permitted. This was said by one of our sources.
During this month’s parliamentary session, the administration plans to present and enact cryptocurrency legislation.
Thousands of mentoring currencies rely on not being subject to governmental oversight, and a pre-verification strategy would put them at a disadvantage.
Indian Prime Minister Narendra Modi added his first general public statement on the topic on Thursday. He stated that all democratic countries must work together to ensure that Bitcoin “does not wind up in bad hands, which may corrupt our young.”
This year, the government was considering criminalising crypto-assets, such as Bitcoin and Litecoin.
Although it has modified significantly since then, two sources said heavy capital gains and some other taxes may be imposed on cryptocurrency trading to discourage it.
According to a senior government source, investors “will have to pay over 40 percent on any crypto profits thus far,” adding that extra goods and services sales taxes, and capital gains taxes taxes, might be charged on top of any capital gains taxes.
An email sent to the Finance Ministry was not returned.
In light of fears that uncontrolled crypto markets might become routes for money laundering and terror funding, Modi presided over a discussion on the future of cryptocurrency last week, according to sources independently on Saturday.
As per the source who participated in a separate parliamentary panel debate on Monday, the new laws are expected to limit the marketing and promotion of cryptocurrencies in order to dull its appeal for individual investors.
According to two sources, the government is aiming to designate crypto as an asset class rather than a currency.
In contrast to what the senior government source tells Reuters, the ultimate goal is to outlaw private crypto-assets and pave the way for a new Central Bank Digital Currency (CBDC).
“Serious worries” regarding private crypto have prompted Reserve Bank of India to create the CBDC in December.
The price of Bitcoin, the world’s most popular cryptocurrency, is now hovering around $60,000 and has more than doubled since the beginning of the year, drawing throngs of local investors.
Since China’s NDRC is China’s foreign exchange regulator and state planner, it has said that it would continue to clean up virtual currency mining in the nation.