The disappointed expectation in the price of the world’s top digital currency, which slumped to a low of $864 on Christmas Day, and the market cap that reversed on the previous gains to $13.88 bln is now being corrected, a push Indian market insiders say will continue till at least Q1 2017.
Bitcoin is now worth $915 after a sloppy Dec. 25 market, with the market cap standing at $14.6 bln.
Why India again
The effect of the Indian market on Bitcoin is in the news again. The co-founder of Zebpay, Sandeep Goenka, believes that India should still be in the Bitcoin picture even though the demonetization exercise which the country embarked upon is yet to end.
“Yes, it absolutely should be because we have a huge potential Bitcoin market which is still very small. We continued to add 50,000 users and will do more than $15 mln in Bitcoin trades in December. These are small numbers for India.”
Coinsecure’s Mohit Kalra shares a similar view noting that the demonetization exercise hasn't yet ended, with several Indian financial and banking experts suggesting that the problem will continue until the end of Q1 in 2017.
He added that Bitcoin has been getting a lot of attention in Indian news articles, cover stories and prime-time news debates, hence he expects a correlation between the financial problems in India and a Bitcoin price rise at least until January and the end of February.
Kalra says: “Especially with the New Year buying and investments. Quite a few people are losing faith in the government and are looking at other ways to hold their wealth. With bans and restrictions on gold, the smarter ones are getting on board to Bitcoin.”
Going strong again
Asked if he foresees a $1000 Bitcoin in the next few days, Kalra seems optimistic on the basis that adoption is increasing without any doubt.
“Prices will keep going higher and will remain at a premium in India compared to global markets until the supply and liquidity rise to better levels in India. It might hit $1000 again. It already hit that in India just a few weeks ago.”
Sandeep did not comment on short-term price movements but notes that Bitcoin prices in India are currently matching those in the US. However, he says it trades at a premium in India typically when prices rise fast internationally and that the prices match international rates when volatility goes down.
“I believe that all Bitcoin fundamentals are very strong. I expect a price of $2,000+ by the end of 2017. I do believe that Bitcoin is increasingly eligible as an alternate asset class and investment.”