On March 14, bitcoin traded at a new high of USD 61,556.59 mainly due to US President Joe Biden announcing USD 1.9 trillion fiscal stimulus and acceleration in COVID-19 shots. But this peak was short lived, within two days Bitcoin’s valuation slumped and traded at USD 53,350.37 (24-hour low), according to Coindesk.
This year Bitcoin has gone by 90 per cent.
This drop can be attributed to the hint dropped by Indian Finance Minister Nirmala Sitharaman on cryptocurrency. During an event, Sitharaman stated that while the Reserve Bank of India may take a call on official cryptocurrency but from the government's side, it is very clear that it is “not shutting off all options”. Thus, hinting at some level of stringent action in this space. It will be a wait and watch approach for the investors in the second largest democracy.
According to Reuters, a senior government official said that India, Asia's third-largest economy, is preparing a bill that would criminalise possession, issuance, mining, trading and transferring crypto-assets. The bill was in line with India's January government agenda that called for banning private virtual currencies such as bitcoin, while building a framework for its own official digital currency.
Sitharaman had mentioned that a note is being prepared for cryptocurrency. “It's almost nearing completion and then it will be taken to the Cabinet... we will allow a certain amount of windows for people to experiment on blockchain and bitcoin. However, the formulation of cryptocurrency will be part of the Cabinet note which will get ready soon.”