- Date : 02/12/2021
- Read: 4 mins
Do you hold cryptocurrency and are thinking of selling due to fear of a ban? Are you a new cryptocurrency investor and looking to take advantage of a fall in prices? We try to answer some of your questions regarding the crypto ban.
In early 2021, the Supreme Court struck down the RBI ban on cryptocurrencies. Since then, many Indians have started investing in cryptocurrencies. As per an article published on Indiatoday.in, Indian crypto exchanges and industry bodies recently published a joint advertisement, claiming that crypto investments by Indians have crossed Rs 6 lakh crore, and the number of investors had grown exponentially to over 10 crore.
However, after news broke that the Indian Government will be introducing the Cryptocurrency Bill in the winter session of Parliament, there has been a lot of optimism and pessimism regarding what stand the Government will take on cryptocurrencies. There is a lot of confusion regarding whether existing investors should sell their crypto holding or new investors should take advantage of the current price fall and buy crypto.
Let us see what experts have to say on this:
What is the Government expected to do?
Before discussing what you should be doing, let us first see what the Government is expected to do. Either of two scenarios can emerge once the Bill is tabled in Parliament:
a) The Government may ban all private cryptocurrencies and allow existing investors to exit their investments, transfer the sale proceeds to their bank accounts, and close their crypto accounts.
b) The Government may regulate cryptocurrencies by categorising them as digital assets and taxing them accordingly. There can also be different scenarios in this option, with certain cryptocurrencies being categorised as digital assets and others getting banned.
While we won't know the Government’s exact stand on cryptocurrencies until the Bill is tabled in Parliament, let us see what industry experts have to say.
What the experts say
As news spread of the Government introducing a Cryptocurrency Bill, there was a lot of panic selling by investors on the crypto trading platforms, which led to a quick fall in prices of various cryptocurrencies. Experts have cautioned investors not to panic and avoid selling at this stage. When Indiatoday.in spoke to some industry experts, this is what they had to say:
Edul Patel, CEO and co-founder of Mudrex, a global algorithm-based crypto investment platform, said, “The speculation around the banning of private cryptocurrencies in India caused a massive panic selling across Indian crypto exchanges. Investors should note that the news about the ban is mere speculation, and the contents of the Bill are not yet clear.”
According to Hitesh Malviya, founder, itsblockchain.com, “I don’t think the Indian Government will make the mistake of banning a thriving economy that can contribute decently to our GDP. My appeal to investors is: don’t panic sell, wait and watch for the regulation Bill to be passed in the winter session, and you will get an idea about the future of crypto investing in India”.
WazirX CEO Nischal Shetty also asked investors not to panic and avoid selling at this stage.
While there was a sharp fall in the prices of various cryptocurrencies due to panic selling, experts have also advised optimistic investors to avoid buying right now even at low prices. Experts have advised investors to neither sell nor buy till the Government makes its stand clear. They have urged investors to stay calm.
What if the Government bans cryptocurrencies?
In the extreme case, what if the Government bans cryptocurrencies? If that scenario were to unfold, the Government would be conscious of the fact that crores of people have already invested in crypto. Experts believe that if a ban is imposed, the Government will give time to existing investors to sell their cryptocurrencies. They will get an opportunity to transfer the sale proceeds to their bank account and close the crypto account.
Currently, there is a lot of confusion and panic among investors. But experts are asking investors to stay calm and not to sell/buy crypto for now. It makes sense to wait till the Cryptocurrency Bill is introduced in Parliament and the Government makes its stand clear. Once that happens, investors can take their next course of action. Right now, most experts believe the Government will regulate and not ban cryptos. Let us wait and watch.