Bitcoin Flat at $60,000 as India Proposes Law to Ban Digital Assets
Bitcoin consolidated around $60,000 on Monday, taking a break from the weekend’s record high as investors watch out for inflation amidst the U.S. stimulus spending, which might propel inflation even higher.
The world’s most popular cryptocurrency slipped as low as $58,956.90 early in the Asian session, falling from Saturday’s record high of $61,781.83.
India’s Proposes Law likely to Impacts Bitcoin
The rally may have been suppressed by India’s decision to propose a law banning cryptocurrencies which will fine anyone trading in the country or even holding such digital assets.
The bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied. Officials are confident of getting the bill enacted into law as Prime Minister Narendra Modi’s government holds a comfortable majority in parliament.
This will be one of the world’s strictest policies against cryptocurrencies, which would criminalize possession, issuance, mining, trading and transferring of crypto-assets.
Bitcoin, however, has more than doubled in 2021, following high-profile endorsements this year from the likes of Tesla’s Elon Musk, Twitter’s Jack Dorsey, and investment giants Goldman Sachs and BlackRock.
“Investment by institutional investors and corporates is increasing. It’s what I call the financialization of bitcoin,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
“It’s becoming an asset that investors can no longer ignore.” Masafumi Yamamoto said
In the past month, BTC soared past $55,000 in February but slid back to as low as $41,000 before resuming its upward run. Bitcoin is up about 1,000% in the past year amid signs of increasing institutional interest and speculative demand.
The $61,000 record surge was helped by an improvement in risk appetite in financial markets after President Joe Biden signed his $1.9 trillion fiscal stimulus package into law and ordered an acceleration in vaccinations.