As Bitcoin price falls, is cryptocurrency still worth buying?
The onslaught of crypto winter and recent events have marred the spirits of crypto investors.
Various events like the recent breaks in operations where Vauld (a leading crypto exchange platform) paused the withdrawals and called off their operations,
Voyager Digital (a crypto broker) filed for bankruptcy, the collapse of Luna crypto and many such cases across the world are shaking up the investors.
Archit Gupta, Founder & CEO Clear says the price of Bitcoin, the first and most prominent crypto, rose to $68,000 in November 2021.
Shortly after, it nearly halved in price to $35,000 and continued to decline. Today it stands at around $21,000. This tells us of the volatility and speculations in the crypto markets.
Given the macroeconomic environment, market volatility, and mass exodus of investors from the market, the scales of demand and supply are heavily tipped, accelerating the risk even further.
To top it all, the new tax rules add to the woes of the investors.
The government announced that 1% TDS must be deducted on all crypto transfers over ₹10,000. “ These tax rules will increase the regulatory and compliance burden.
The tax rules have further increased the challenges as they may lock up the required liquidity to revive crypto markets," said Archit Gupta.
He added that given how people invest in crypto with little knowledge and more influence,
one must appreciate these regulations as they will only help secure investors’ money.
Vikas Singhania, CEO, TradeSmart says apart from TDS, the brokerage, and GST charges have added more risk to trading in cryptocurrencies.