Mumbai: Several Indian investors rushed to close positions in lesser crypto; while others sought safety in safer names such as; Bitcoin and Ethereum as the asset class plummeted on Friday and Saturday after the Chinese central bank declared all cryptocurrencies illegal.
Transaction volumes at key Indian exchanges have increased by about 50% in the last two days, according to industry watchers. Most exchanges that deal in such assets experienced a rush to sell lesser cryptocurrencies. Veteran investors; according to industry observers, were largely calm; but those new to the bitcoin market reacted to the news flow from Beijing.
“The largest sell-offs we’ve seen are in the biggest gainers as investors; are likely to cash out their investments in assets like Cardano; Solana, Matic, and the like,” said Shivam Thakral, chief executive, BuyUcoin, a cryptocurrency exchange.
According to industry observers, while Bitcoin saw a sell-off, only a small number of investors reduced their holdings.
In certain circumstances, investors shifted from smaller crypto assets to Bitcoin and Ethereum.
Until the beginning of this year, most Indians invested a significant portion of their savings in Bitcoin. That has recently changed as many new-age investors have entered the bitcoin sector.
Until the beginning of this year, most Indians were investing a significant portion of their savings in Bitcoin. This has recently changed as many new-age investors have entered the bitcoin sector.
Exchanges trading in such assets anticipates that the China impact will be transient; though the next several days may witness additional panic selling before the dust settles.
George Zarya; chief executive at digital asset brokerage and exchange Bequant; said, “China has been known to go to extremes with either very assertive statements and prosecutions or complete radio silence.”
‘China Will Not Support’
“This time; the point was made very clear,; that China will not support cryptocurrency market development as it goes against its; policies of tightening up control over capital flow and big tech,” said Zarya of Bequant.
“For the institutional crypto industry; it won’t change much as those who could leave have already left; and those who couldn’t have either closed or gone under the radar. The retail market, most likely, has gone under the radar and will continue to support market volumes,” he added
China recently declared that it will issue its own digital money in the near future. Experts are expecting that Beijing would refrain from taking any drastic measures. “The Chinese central bank has been lobbying against crypto for a very long time. This recent move wasn’t a surprise to many people as everyone saw it coming,” said Thakral of BuyUcoin. “But we hope China will reconsider its decision and create a healthier environment for crypto enthusiasts moving forward.”
Source: The Economic Times