Legalization of cryptocurrency behind the market crash: Experts

The Sensex and the Nifty are unable to recuperate after the World Health Organization (WHO) declared the corona virus an epidemic, Yes bank crisis and fall in global oil prices. But experts believe legalisation of cryptocurrencies such as Bitcoin also plays an important role behind the bloodbath at Dalal Street in last couple of days.

Earlier this month the Supreme Court allowed banks to handle cryptocurrency transactions from exchanges and traders, overturning a central bank ban that dealt the thriving industry a major blow.

The Reserve Bank of India (RBI) had in April 2018 ordered financial institutions to break off all ties with individuals or businesses dealing in virtual currency such as Bitcoin within three months.

The ban led to plummeting trade volumes and exchanges shutting their businesses. But after lifting the ban on trading in cryptocurrencies such as Bitcoin, investors are now evaluating how to move forward. While crypto-enthusiasts are hailing it as a positive judgment, traditional market investors are raising concerns.

“Cryptocuurency is being seen as a good investment option instead of putting money on traditional stocks. In past digital currencies have given better returns and a safer investment alternate in this volatile market,” said a trade expert on recent fall of market.

What did Supreme Court say

The Supreme Court has laid down a major verdict: the RBI’s rule that banks could not work with crypto businesses of any sort has been smacked down. In a 180-page document, the court claimed that the proposed arguments against Bitcoin (including its potential use by criminals to obscure their illicit transactions) were not sufficient to justify such repressive measures against the entire industry. Indeed, it ruled, driving ordinary crypto enthusiasts underground may only serve to increase community members’ skills at obscuring their actions.

What is Cryptocurrency:

A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. The major cryptocurrencies include Bitcoin, Ethereum and Ripple. Since October 2019, bitcoin — the most popular virtual currency globally — hit $10,000 mark against the US dollar for the first time earlier this year. Bitcoin gained three and a half times in just 35 days in late 2017 to reach nearly $20,000. However, it, later on, plunged 70 per cent in seven weeks.