By Arun Kumar Shrivastav
Bitcoin has been rising over the past few weeks and it is currently trading at above $90,000. With the $92,000 level breached, Bitcoin seems headed for the $100K mark. Bitcoin has surged 36.33% in 1 month, over 20% in 7-day and 3.45% in 24 hours. In a year-long period, BTC has surged a whopping 147%. For the critics of Bitcoin, it’s a challenging moment. However, this is historic for those who see BTC as the currency of the future. BTC is within striking distance of the $100K mark. The good news is that even other coins and tokens have seen a strong price rally.
Earlier, when BTC surged to $72,000 levels in mid-September, many altcoins saw their prices decline. It meant that investors pulled out their investments from other coins and reinvested the funds in BTC. But this time, altcoins are also seeing an increase in their prices, meaning the entire cryptocurrency market is riding a bullish trend. The overall market capitalization of the crypto industry has soared well past $3 trillion, with BTC contributing $1.78 trillion.
What’s making BTC rise like this? There are several factors. The most recent and potent factor is the victory of Republican candidate Donald Trump in the US Presidential election. Over $20 billion of donations flowed into the 2024 presidential campaign, with a major part of this going to Trump. With Trump winning the race, the donors have hit the jackpot. Crypto billionaires and organizations donated handsomely to Trump’s campaign as he promised to support the cryptocurrency industry. He also promised he would remove SEC chairperson Gary Gensler. Now that Trump has won the election and is slated to take over as the US President in January 2025, Bitcoin’s value is skyrocketing. Elon Musk, with all his technology companies and crypto assets, supported Trump. Time for all these geeks to cheer!
However, a recent Bitcoin halving that reduces the pace at which new coins are minted is believed to be the fundamental force behind the surge. The Bitcoin halving event took place on April 19, 2024, and it reduced miners’ benefits by half. Earlier, miners were rewarded $6.250 for creating a block. Now, they get $3.125 BTC for the same job. Every four years, this event creates a scarcity of Bitcoin, pushing the price up. This is part of the Bitcoin founders’ vision as a deflationary strategy.
Geopolitical tensions have also contributed significantly to the recent surge of BTC. With wars raging in many parts, investors are parking their money in inflation-resistant assets such as gold, whose price has increased to record levels, and bitcoin, which has proved to keep the value intact and give the investors a solid return. As mentioned earlier, BTC has gained nearly 150% in a year.
However, India is officially not a part of the Bitcoin saga. We don’t have a policy vis a vis Bitcoin. Many governments, including Bhutan, have invested in Bitcoin, but India’s status on this count is unknown. Indians are officially discouraged from investing in Bitcoin and other cryptocurrencies. India is losing the natural advantages it has in the form of a suitably qualified and skilled talent pool. It has even led to the migration of a skilled workforce, startups and funds. As bitcoin keeps surging to new heights, even now, there is still time for the government to work out a fair policy for the cryptocurrency industry. Not having a policy only indicates our policymakers are in a dilemma. The government has been indecisive on this issue for far too long.
With Donald Trump becoming the US President, the regulatory environment for cryptocurrencies is expected to become clearer and more pro-business and pro-innovation. India will be left out if it doesn’t put its act together and respond to emerging opportunities and challenges. (IPA Service)
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