How India Views Bitcoin Impacts Bitcoin Price
Bitcoin sees a massive price increase recently. It broke the $781 record price of the year in June as the price of Bitcoin at the time of writing was above $790. The high demand for the cryptocurrency pushed Bitcoin exchanges to set the Bitcoin value to about $850 on the average. Other exchanges position the cryptocurrency between $980 and $1,000.
There are several factors behind the continuous rise of Bitcoin price. One of them is the recent demonetization in India. This has led the Indian market to consider Bitcoin as a better investment than silver or gold.
In order to resolve Indian’s problem with corruption, Prime Minister Modi ordered the demonetization of the 500 and 1,000 bank notes. Modi also placed a restriction in gold trading to prevent the black market from using gold as another form of black money. Black money served as a means to earn money without paying any taxes.
Popularity of Bitcoin in India
The search term ‘buy Bitcoin’ surged in Google trends data. There was also a significant rise in the number of downloads for Bitcoin exchange apps like Zebpay. LocalBitcoins also saw a massive increase in their trade volume. These are clear signs of an increased interest in Bitcoin among Indian residents. The press and media in the country also elevated the digital money’s popularity by reporting on its high demand.
The high interest in Bitcoin has a lot of Indians creating Bitcoin wallets. Many of them are looking for a financial sanctuary to escape from their government’s decision. Others are buying Bitcoin as a form of protests from the way the Indian government handles the country’s corruption problem.
Due to the large demand in Bitcoin, trading premiums have also increased in order to slightly bring down the demand and keep the order book tight. The premium at the start of September was around $20 only. Today, trading premiums have jumped to $70 to $100. India’s demand for the cryptocurrency created an impact on Bitcoin prices around the globe.
As a result of the government’s restrictions, locals now view Bitcoin as an investment despite its high premium prices.
Looking for other investments
The restriction of gold has made a large ripple in the gold market of India. This year has a record low consumption of jewels and gold. A lot of people are afraid of owning gold because of the recent restrictions. Many of them are worried of the day where the authorities will come in and take away their hard earned gold. This is the reason many ordinary folks and businessmen look for investment alternatives. One of this is gold’s closest cousin, silver. Silver was able to enjoy an increase in value in the country recently.