There goes India’s cryptocurrency market. The Reserve Bank of India banned banks from allowing people to transfer money from their bank account into Bitcoin wallets. If banks, e-wallets and any other entities regulated by RBI are not allowed to facilitate sale or purchase of cryptocurrencies, individuals will not be able to transfer money from any bank account in India into a Bitcoin wallet like Bitpay, nor will they be able to fund purchases of cryptocurrencies on an exchange. They’d have to figure out a way to pay people in cash, meaning if there is a Bitcoin market in India, it is going to move underground. The RBI banned Bitcoin on Thursday, effective immediately, according to The Economic Times.
India is not a huge market for crypto, so Bitcoin was down only 2% today and probably not due to the RBI’s announcement. China, South Korea, Singapore, Japan and the U.
S. are the biggest markets for cryptocurrencies. Investors in these new digital assets have been waiting for the next big thing, but have been stuck with what one investor calls “mediocre coins from mediocre startups.
” The market needs something new following last year’s run-in in Bitcoin and other top cryptocurrencies like Ether.
Messaging app Telegram is launching a coin sometime this year , but that has been closed to retail investors.
China has kept its ban on Bitcoin exchanges and initial coin offerings (ICO). And while India is not a big player, it just serves as a reminder of the headwinds the industry faces. This is keeping out short-term investors.
If India is banning Bitcoin transactions, how does a startup there enter the ICO market? This is all very new, so no one has the answers yet.
But it does seem like the RBI just dealt Bitcoin and crypto a severe blow on Wednesday.
See: Mysterious Partner Gives Verge Coin A Boost — Forbes
Reserve Bank of India Governor Urjit Patel warns banks not to allow for transfers into cryptocurrencies, shaking up the local crypto market. (Photo by PUNIT PARANJPE/AFP/Getty Images)
Some countries are preferring to regulate rather than strangulate.
Australia recently announced new crypto exchange regulations .
Seoul is testing its own cryptocurrency. Earlier this week, Ethereum gained after the Central Bank of Russia projected that a proposed payment network would be developed based on Ethereum. Ripple is in talks with the Bank of Thailand, meaning simply that there is interest in traditional sectors of the economy for digital money.
Close crypto watchers are being forced to learn a whole new vocabulary (it’s hodl not hold.
Don’t ask).
They are also required to be computer code laymen, understanding hard to grasp concepts like hard forks and new chips and other processes that can make or break a blockchain platform due to speed.
Last year was the Gilded Age of crypto. Anyone with a dart board could single out a winner. Close your eyes, pick a token, put a couple hundred bucks to work, and voila , it quadrupled in a matter of days.
A collection of bitcoin, litecoin and ethereum tokens sit in this arranged photograph. Last year, billionaire Warren Buffett said on CNBC that most digital coins won’t hold their value. (Photographer: Chris Ratcliffe/Bloomberg)
See: What U.
S. Company Will Be The First To Issue Its Own Cryptocurrency? — Forbes
“After the skyrocketing expectations of technologies and new horizons in 2017, cryptos are now experiencing what I call a cold winter, trying to fulfill their promise,” says Alexey Ivanov, an investment manager on Polynom Crypto Capital in Moscow. “I think you can see coins like Cordano (ADA) do well; the Lumen (XLM) platform is really good, and NEM (XEM) could get some fresh tailwinds in the upcoming months,” he says.
Other coins have had failed projects and security breaches dull their shine more than official bans by central bankers.
“Look at Litecoin (LTC), it’s been a disappointment with their Litepay shutting down recently,” he says. “New projects are coming to market with some exciting developments, however,” he says, mentioning the WAX coin, a crypto focused on 400 million online gamers who already collect, buy and sell in-game digital items.
India bans, social media advertisement bans on ICOs last month , Google’s new cryptocurrency mining extension bans from its website, and failed project launches by well-known cryptos like LTC all show how this year has been a dud for the industry.
Crypto hedge funds are closing due to poor profits. Fewer funds means less pumping and dumping of the smaller coins that go for pennies on the dollar.
In the best case scenario, new startups with bonafide products will give crypto the Street cred some in the market wants it to have.
After all, there are basically three types of crypto enthusiasts, the anarcho-libertarian coder; the startup entrepreneur; and the market maker looking for a new security to get rich on.
Crypto at its best becomes a digital venture capital game for all income streams, whereas the smartest money managers are picking the smartest startup team hoping to stay in business for a while.
The sky looked like the limit for Bitcoin last year.
Not so anymore.
Six years ago, one Bitcoin went for around $15. Today one Bitcoin goes for around $6,600. That’s a nice gain. But it is a far cry from the $19,000 registered in mid-December, and a lot of people bought into Bitcoin once it passed $10,000.
For the first time since its launching, it is no easy to find Bitcoin investors who have lost thousands, if not millions of dollars gambling on cryptocurrencies. This unregulated market, coupled with the risk of investor fraud, is what has central banks like those in India and China shutting down exchanges at home..
