India Flash Crash: Bitcoin [BTC] to $5700 and Ethereum at $459 post Zebpay’s notice to users

Zebpay’s recent notice to Indian users, titled, ‘Prohibition on dealing in Virtual Currencies’ warned that Zebpay will not be able to process the INR withdrawals or deposits if it does not have a supporting bank. Within hours of this announcement, everything from Bitcoin, Ethereum, Ripple and other assets crashed by more than 10% in some cases.

As per the notice by RBI, the financial banking sectors under the purview of the RBI are to comply with the directive by July 5th. The next hearing for the same is said to be scheduled for July 20th. The current “panic-selling” is what the Indian crypto community called temporary and they expect a pull-back pretty soon.

The price of some cryptocurrencies on Unocoin at press time

AMBCrypto spoke to Vishwanath Shastry, Unocoin’s VP, he was optimistic about the future but said that the current reality is that banks will have to comply with the RBI order by July 5th. He says,

“The panic selling right now is because of such notifications. They are just forewarning users to withdraw the current INR. The RBI directive had given 90 days time to pull out support. This 90 days will end after 2 weeks. All exchanges will get affected. But it’s horrible that certain users are selling at a heavy loss. India will be tamed by cryptocurrency soon. This is a fact. It’s just a matter of when.”

Rahul Diwedi, a cryptocurrency investor from Bangalore says,

“Banks like Kotak, Axis have already sent out emails saying they withdraw support from any cryptocurrency related transactions. I’m ashamed to live in such a country which are not open to development and progress. They are in turn going to increase under the table transactions.”

Indian BTC, ETH, XRP and other crypto prices on Zebpay at press time

Timothy Gilbert, a crypto investor from Michigan says,

“If anyone knows anyone in India please go and buy, it’s dirt cheap there. Buy BTC, sell somewhere else. Instant 20% profit boom.”

There is a committee which has appealed against the RBI order in the Supreme Court and the next hearing is scheduled for the 20th of July. There are three possible scenarios expected in this hearing:

Ban Lifted – This scenario is highly likely especially after the RTI that was filed revealed that the RBI’s decision was immature and hasty.
The date being postponed – This is the second most likely scenario given the Indian court proceedings
Ban not lifted – This is the least likely scenario but cannot rule out this possibility.
At press time, there was a slight buying pressure which pushed the BTC prices back up to $6200 which is still trading lower to the global average.