Crypto Talk #2 Is India going to Ban the Cryptocurrency Trading?

The news came as quite a shock to the crypto faithful in India when the buying and selling of any Cryptocurrencies were banned by Indian Government. It was shocking to see the most significant and well-performing Bitcoin falling by nearly 11%, which is apparently its lowest since the November of last year.

Bitcoin, the leading cryptocurrency, which has been the talk of the crypto town, hit a high point of nearly $20k last year and now it has come down by almost half with all only $9k approximately to its value. This was after the declaration by Arun Jaitley, Indian Finance minister, vowed that Cryptocurrencies would be banned.

Why Cryptocurrencies banned?

Cryptocurrencies have been subjected to some opposition in the recent times, probably owing to its sudden increase in market value to unimaginable heights. It is not just India where the regulators have been nervous about the Cryptocurrencies that has taken the market by storm in a brief period.

Given the fact that cryptocurrency trading can be done anonymously, it can be easily used for multiple illegal activities including money laundering, terrorism financing, etc. This has raised the red flag for many Governments including India, which has equaled this to a possible Ponzi scheme.

Recently Facebook also banned the adverts relating to any financial service or the product like initial coin offering, binary options, and Cryptocurrencies in its platform.

Is it banned though?

In the words of the Finance minister, the Cryptocurrencies legal tender or coins are not considered by the government. And he further added to take the necessary measures to eliminate the possibility of using them to finance illegal activities.

The words of the finance minister are quite dubious as it doesn’t speak about the legality of the Cryptocurrencies as such. The media has however managed to interpret (or maybe misinterpret) that the Cryptocurrencies have been banned. In fact, the finance minister has further added that Government will proactively explore blockchain technology to make way for a new digital economy.

Why is there a crash in BTC?

It is evident that Finance minister was not referring to a ban on Cryptocurrencies, but he was instead relating to the elimination or ban of illegal activities using Cryptocurrencies. But is this misinterpretation the only reason for the crash in the BTC and other cryptocurrency value?

It seems not. The BTC and its fellow Cryptocurrencies like Ripple and Ethereum have been struggling from the start of this year. If you look at the end of last year, you will see that Bitcoin climbed up from a mere $3000 to a whopping $20k in just a month’s time.

But ever since New Year, the coin has been struggling and so are its counterparts. The rumor that the Tether has been raising value artificially could very well be the reason for the rough patch.

Tether, a cryptocurrency token on Bitcoin blockchain, has been facing severe regulatory issues in the US. Alongside there have been suspicions that new Tethers are being introduced whenever there is a drop in BTC prices to scoop it up.

If this claim is valid, then Tether has been inflating the price of Bitcoin artificially, and when the truth is discovered, it can have a serious repercussion on the Bitcoin, termed by many financial analysts as “Bloodbath.”

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