As the value of Bitcoin reached its new all-time highest of $11,000 per bitcoin, even the conservative Indian investors cannot resist the boom to invest. This has happened despite the fact that Indian central bank had declared bitcoin an illegal currency in the country.
According to Mr. Sathvik Vishwanath, co-founder, and CEO of Unocoin, a bitcoin exchange, “It took us about three years to gather one lakh (100,000) registered customers, and in last one month itself we have seen about 2 lakh (200,000) customers registering with us.” This registration jumped due to the rise in the price of a bitcoin in India from Rs459, 047 on Nov 1st, up to Rs860, 049 by Nov. 29.
Similar Situation With Other Crypto
A similar picture is replicated in other digital currencies in the country. According to Mr. Sandeep Goenka, co-founder of Zebpay, a bitcoin exchange, “The extent of interest in bitcoins is at unprecedented levels,”… “Every time prices increase, investors who were sitting on the fence and were skeptical do enter the ecosystem.” He said. He was quick to add that, “This time it almost feels like mainstream adoption, something I have never experienced before because now we are seeing interest coming in from even the conservative investors,”
Financial experts are saying that on one hand Indian citizens who are not experienced in bitcoin starts by investing small amounts of money like Rs 500 or Rs 1,000. While on the other hand, seasoned investors are willing to invest between Rs 200,000 and Rs 500,000 in bitcoin. In addition to that, these investors are not only those in big cities only but also from smaller town from across the country.
The Boom’s Duration
It is not known for how long bitcoin’s boom in price will continue. But considering the fact that it has a limited supply, some financial experts are saying that the increase in rate might continue to increase. However, others are of the opinion that a price correction is in the offing. Yesterday the price of bitcoin adjusted itself downwards despite the fact that it has been on the rise for a number of days on a row.
The increased interest in bitcoin by the Indians comes a few days after the government and the central bank had expressed their discomfort about this currency. Earlier, a statement that was issued read, “the use of crypto in India is a violation of the foreign-exchange rules.”
Despite these concerns that were raised by the government, the crypto exchangers are saying, “If India had to ban virtual currencies then they would have done that by now. In the last three years, the RBI’s statement has been the same, that they are uncomfortable with it and people should invest at their own risk,” said Mr. Vivek Steve Francis, CEO of Coinome, a cryptocurrency trading exchange.
Mode of Transaction
Some of the exchanges say that they have checks and balances in place and hence they have concerns since the central bank issued regulations against these digital currencies. According to Mr. Francis, “No cash or cheque is accepted, all transactions are routed via online bank transfer to ensure that there is a money trail,” he also added that “Moreover, we also follow the electronic know-your-customer procedure and also check the Aadhaar number to ensure that fraudulent transactions are avoided.”
Booming Online Lending
India is experiencing an increase in the online lending technology. Most of the lenders, they rely on unconventional data to access the consumer’s loan eligibility. For the last two years, there has been a rapid growth of online lending firms. The reason for this is attributed to the fact that banks were serving about 70% of Indian citizens up to the year 2015. But now, even banks are investing in online lending services. The online services are faster and better.
According to Jeet, the founder of Rubique says that “As a consumer, our needs are evolving and we need scenarios where there is a faster turnaround time. By using artificial intelligence and algorithms, we can drastically reduce the time taken to approve a loan request, compared to the traditional lenders,”
As compared to banks, the private lenders can lend money within a few minutes using algorithms that collect the personal data of a potential client. However, the rule of law in all their transactions if the capacity and intention of the borrower to pay back.