The current weekly candles are looking reminiscent of the beginning of the 2017 bull run. BTC is in a parabolic trend and there is support from another extremely bullish trend line if it breaks this one. Kraken Intelligence predicts this cycle to reach $103k minimum and it lines up nicely with the 2.618 trend based fib extension. In further flashbacks to 2017, governments are banning crypto. This time it is India rather than china. The fundamentals here are going to determine price more than the technicals, so let's take a deeper look.
India Bans Cryptocurrency
India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets. Even China, which has banned mining and trading, does not penalise possession. Holders of cryptocurrencies have up to six months to liquidate.
The draconian bill is believed to give jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies (1).
Why?
Illicit activity with crypto is no longer a valid argument for censorship. It is currently believed to make up less than 1% of Bitcoin transaction activity, a stark contrast to the 2% to 5% of global GDP caught up in money laundering alone. As legitimate cryptocurrency use goes up, crypto crime as a percentage goes down. 2020 crypto crime was $1.9 billion in 2020, down 57% from 2019’s $4.5 billion (2).
The Reserve Bank of India voiced its concern again last month, citing what it said were risks to financial stability from cryptocurrencies. At the same time, the central bank has been working on launching its own digital currency, a step the government’s bill will also encourage.
Quantitative easing (inflation) is seen by governments as imperative for maintaining financial integrity and mitigating financial crisis, despite the negative socio-economic effects associated with the loss of purchasing power (3).
Bitcoin is immune from both fiscal and monetary policy and avoids the need for cross-border foreign exchange transactions. The Indian government is therefore likely banning cryptocurrency eliminate competition, centralising financial power and imposing inflation and monitoring on national digital currency users.
Implications
Governments acting to improve the well-being of a community often make misjudgements, unintentionally creating “almost as much harm in ruining lives and destroying wealth as the most destructive wars”(4).
The proposed ban on crypto will be particularly damaging to the already poor financial inclusion in India. A World Bank study that found there were over 1.7 billion unbanked adults in 2017 (5).
It is unlikely that other governments will follow in India’s steps. However, for institutional investors to participate in a new asset class, it must be underpinned by a robust infrastructure able to support an efficient market, so more regulation is expected. Governments themselves are being pressured and many are re-considering their own currency offerings (6).
Bitcoin's global reach and neutrality could spur it to become the currency of choice for international trade (7). It is almost impossible for a government to shut down access to Bitcoin and other cryptocurrencies or prevent its ownership or usage without what would effectively amount to a shutdown of the global Internet (8). Today, access to the Bitcoin network is enabled by satellites in areas with unreliable or no Internet connection, which further reinforces its censorship-resistant properties (9). India’s poor policy making simply slows national institutional adoption.
India Bans Cryptocurrency
India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets. Even China, which has banned mining and trading, does not penalise possession. Holders of cryptocurrencies have up to six months to liquidate.
The draconian bill is believed to give jail of up to 10 years on people who mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies (1).
Why?
Illicit activity with crypto is no longer a valid argument for censorship. It is currently believed to make up less than 1% of Bitcoin transaction activity, a stark contrast to the 2% to 5% of global GDP caught up in money laundering alone. As legitimate cryptocurrency use goes up, crypto crime as a percentage goes down. 2020 crypto crime was $1.9 billion in 2020, down 57% from 2019’s $4.5 billion (2).
The Reserve Bank of India voiced its concern again last month, citing what it said were risks to financial stability from cryptocurrencies. At the same time, the central bank has been working on launching its own digital currency, a step the government’s bill will also encourage.
Quantitative easing (inflation) is seen by governments as imperative for maintaining financial integrity and mitigating financial crisis, despite the negative socio-economic effects associated with the loss of purchasing power (3).
Bitcoin is immune from both fiscal and monetary policy and avoids the need for cross-border foreign exchange transactions. The Indian government is therefore likely banning cryptocurrency eliminate competition, centralising financial power and imposing inflation and monitoring on national digital currency users.
Implications
Governments acting to improve the well-being of a community often make misjudgements, unintentionally creating “almost as much harm in ruining lives and destroying wealth as the most destructive wars”(4).
The proposed ban on crypto will be particularly damaging to the already poor financial inclusion in India. A World Bank study that found there were over 1.7 billion unbanked adults in 2017 (5).
It is unlikely that other governments will follow in India’s steps. However, for institutional investors to participate in a new asset class, it must be underpinned by a robust infrastructure able to support an efficient market, so more regulation is expected. Governments themselves are being pressured and many are re-considering their own currency offerings (6).
Bitcoin's global reach and neutrality could spur it to become the currency of choice for international trade (7). It is almost impossible for a government to shut down access to Bitcoin and other cryptocurrencies or prevent its ownership or usage without what would effectively amount to a shutdown of the global Internet (8). Today, access to the Bitcoin network is enabled by satellites in areas with unreliable or no Internet connection, which further reinforces its censorship-resistant properties (9). India’s poor policy making simply slows national institutional adoption.
(2) ciphertrace.com/2020...y-laundering-report/
(3) onlinelibrary.wiley....68-0297.2012.02555.x
(4) www.google.co.u...cs/G_kJlw01jAQC?hl=en&...
(5) globalfindex.worldbank.org
(6) www.imf.org/en/...urrencies-46233?utm_source...
ir.citi.com/peFJTnze...gv6cWRpDHGWtIk7sTME=
(7) ir.citi.com/peFJTnze...gv6cWRpDHGWtIk7sTME=
(8) www.bloomberg.com/op...a-can-t-kill-bitcoin
(9) blog.bitmex.com/bitcoin-satellite/