Sometimes no bad news is seen as good news, too. While the year gone by witnessed a series of setbacks for cryptocurrencies including 30 percent capital gains tax, the New Year is ushering in positivity and hope for crypto investors.
Incidentally, there was no negative commentary around digital currencies in the Budget 2023, and their prices have also witnessed a significant jump in the past couple of months.
A report by Reuters, while relying on the options trading data, asserts that bitcoin and ether have recovered noticeably in the recent past.
The report states that the total volume of bitcoin and ethereum options jumped significantly on Deribit in January against the previous month.
In the past three months, bitcoin prices have recovered by over 25 percent to hit $23,193 on Wednesday at 8.50 GMT. At the same time, the overall market capitalisation of crypto tokens crossed $1 trillion again, shows the CoinMarketCap data.
Even the second most popular cryptocurrency Ethereum recovered by 52 percent from $1,100 on Nov 9 to hover around $1,671 on Wednesday, the CoinMarketCap data shows.
The Binance Coin also witnessed a jump of 23.7 percent in its price in the past three months from $266.85 on Nov 9 to $330 on Wednesday.
Other crypto tokens have also been trading higher than their previous close.
Ripple trades at $0.399 at 9 am GMT, nearly one percent higher than its previous close, Aptos rose 3.14 percent to trade at $15.77, Cardano rose 2.59 percent to trade at $0.397 and dogecoin trades 0.38% higher on Wednesday to trade at $0.09.
Polygon rose 4.45 percent in the past 24 hours to trade at $1.28 and Solana rose 1.4 percent to trade around $23.64 on Wednesday.
Back to business
WazirX, which had earlier stopped accepting fresh cash deposits on its platform, has resumed accepting them, as confirmed by an email sent to its customers on Jan 27.
However, the deposits can be made by investors only via RTGS, NEFT or IMPS and not via UPI.
During the time when fresh cash deposits were barred, the crypto platform gave the option of peer-to-peer trading to investors wherein they could directly transfer money to the potential seller.
Once investors deposit money into their accounts, the option of P2P trading will automatically get disabled, reads the email referred to above.
Ashish Singhal, Co-founder and CEO, CoinSwitch, says the massive jump in crypto prices has led to 3 times increase in weekly investing activity since January.
"The crypto market has rebounded significantly since the turn of the year, with Bitcoin rising nearly 40% and other coins even more. Now, retail investment behavior, both in traditional and crypto markets, is momentum-based—investing more when prices are rising, and fewer when they are falling. As such, we have been witnessing a rise in weekly investing activity since January—over 3X, and this trend has continued through the Budget week. It is, therefore, not right to attribute this activity to the Budget alone," said Mr Singhal.
However, Gaurav Mehta, Founder of Catax – Simple Crypto Taxes, believes that the overall outlook for cryptocurrencies is still gloomy, and there is no favourable climate for retail investors.
“The absence of negative news in the budget should not be interpreted as a signal to purchase despite the current bull run, particularly for retail investors, given the regulatory uncertainty surrounding cryptocurrencies and the absence of coverage in the budget. Industry has spoken out against 1% TDS, 30% tax, and the inability to deduct losses, but government has continued with implemented policy,” said Mr Mehta.
Sidharth Sogani, Founder & CEO, CREBACO, believes the environment for crypto currencies is still quite gloomy in India with most exchanges on the verge of shutting their businesses.
“Volumes have dropped by 97%. One of the largest exchanges in India is struggling with international exchange. No new money is coming in and the liquidity in the INR order booking is running dry. The government must regulate or the industry in India will see its end soon” said Mr Sogani.