Volatility has a name – cryptocurrency. Every time you think bitcoin and its younger cousins are done with their share of ups and downs, they come to surprise you with alacrity. And soon, they leave you baffled.
This time, they are surprising investors for a marginally good reason.
Although bitcoin prices have declined over 17 percent in just one month but they have recovered nearly two percent in just one day. The current price range of $37,920 is now five percent more than its price a year ago.
As per the Coin Market Cap data, the most expensive crypto token was trading at $45,898 on Jan 4, but dropped to $38,483 on January 31, and further to $36,952 on February 2. However, it started to recover on February 3 as it touched $37,174.
Likewise, Ethereum also rose nearly 4 percent in one day after declining nearly 30 percent in just one month to $2,400 per coin.
Ether rose nearly 4 percent in one day after declining nearly 30 percent in just one month to $2,400 per coin on Jan 27, and $2,700 on January 31. However, it has risen now to over $2,800 on Friday.
But what differentiates Ether’s movement from that of bitcoin is that Ether is still 75% above its price one year ago, whereas bitcoin now trades closer to its price that prevailed one year ago.
Whopping tax rate
Lately, the announcement made in Union Budget by Finance Minister Nirmala Sitharaman on February 1 to tax digital currency gains at the rate of 30 percent has left desi investors jittery and flummoxed. Indisputably, there is resentment over the maximum tab slab levied on the crypto gains.
Surprisingly, this has not deterred investors from trading in cryptocurrencies. At WazirX, for instance, bitcoin trades 1.5% higher at ₹30 lakh and Ethereum nearly 5 percent higher at ₹2.24 lakh on Friday.
Several investors have taken government’s announcement to tax crypto trading as an implicit approval. It is a different matter that government has not made any such move official. A day after the Union budget, finance secretary TV Somanathan clarified that crypto currencies will never become legal tender in India.