Diwali festival
Cryptocurrencies have had a glitzy run in recent months. But is all that shiny gold really?
Since the launch of Covid-19 in India, bitcoin has surpassed all categories of assets, including gold, offering almost 160% return since April. This is not uncommon because cryptocurrencies are widely believed to be separated from the larger economy, which has been embroiled in their worst nightmare.
But the return has attracted so many Indians that they have replaced traditional shops and gifts like gold with cryptocurrensets this holiday season. Hindus look at the festivals of Dhanteras (November 13 this year) and the beautiful Diwali (November 14) by buying gold.
“We can see that there are many people who come to our exchange to give money gifts to their relatives or friends. Young people want to replace gold with real money, ”said Nischal Shetty, founder of WazirX, India's most popular cryptocurrency site.
Another exchange, CoinDCX, offers its customers the option to trade for free (without cash) within a few hours on the day of Diwali. This is similar to the “trading of Mahurat” on the Indian stock exchange where bourses are open for trading at a good hour on Diwali every year, which is one of the market holidays.
But with all that shining aside, can cryptocurrensets replace the store value and security that gold offers?
Can cryptocurrensets change gold?
When bitcoin was introduced in 2009, it was considered a cash-strapped currency, making its use more like gold. People choose to buy gold during the recession as it has nothing to do with earning any other big job.
But that's where the only similarities are.
Cryptocurrencies involving bitcoin (the most popular currency) are highly volatile and highly volatile over the years, and gold prices generally remain unchanged.
Cryptocurrency players acknowledge this instability but say it has diminished over time. They believe it will get better as the growth of money in the market for these funds grows.
"With bitcoin and other crypto assets such as ether gaining more and more investors, it will be almost boring," said Vikram Rangala, crypto exchange marketing chief, ZebPay. “2020 has seen the issue from bitcoin as a speculative asset to the long term, an investment that guarantees investment, and value retention. It also moves like gold, as investors begin to view it as a safe haven. "
Sheirty of WazirX also revealed that major international institutional investors are now buying bitcoin instead of gold. “These institutional investors have always wanted to bet for a long time. This means that cryptocurrencies are now slowly acquiring the status of stable assets, ”said Shetty.
In fact, Sumit Gupta, CEO and founder of CoinDCX, believes that cryptocurrencies are much safer and more stable than gold.
“It is a myth that there is a fixed amount of gold in the world. It is not yet known when all the gold in the world will be mined and there is no reliable way to calculate what is available. While the availability of Bitcoin is fixed at 21 million. You can't dig into more than 21 million Bitcoin and its mining discovery is regulated by the Bitcoin code, "Gupta said.
He also added that there is a possibility that gold may be contaminated, which is difficult for customers to detect. "By comparison, Bitcoin is easily verified as it is in the public finance register of anyone with an Internet connection," Gupta said.
While industry players are hopeful that cryptocurrencies are taking the place of gold, there are still concerns that challenge the financial position of tangible assets such as store-bought assets.
The cryptocurrensets undergo litmus testing
Trading has reason to classify cryptocurrensets as an asset class established as gold. After all, with the exception of investors, exchanges have been the biggest beneficiaries of cryptocurrencies. In India, the exchange saw a dramatic increase in volume as the return of stars brought by tangible funds coincided with a high court decision to lift their ban.
The fact is, however, that tangible investments, despite their growing popularity, have no significant value.
Cryptocurrency investors are hopeful that this will change as people find cases of exploitation or exploitation against them. But, at the moment, adoption is not taking it as fast as governments around the world are still skeptical.
One of the biggest concerns is spending money on the market. According to University of Texas professors John Griffin and Ohio State University's Amin Shams, one company moved bitcoin prices in 2017 while measuring new heights.
So as cryptocurrensets offer strong returns and have some gold characteristics, they still have to deal with this concern in order to compete with the yellow metal.
NEW DELHI (AP) - India has reported 47 new 90,905 cases of coronavirus infection and New Delhi set another daily record on Thursday.
The increase in 8,593 cases in the nation's capital is higher than in any other major city in India and comes as people crowded shopping malls ahead of Diwali, a Hindu festival of lights, on Saturday.
Deaths are also rising, with 85 in New Delhi in the last 24 hours. Death is a poor indicator of the impact of the virus, due to chronic illness and treatment.
All in all, India's new cases are in full swing. The Department of Health also reported that 550 people had died in the past 24 hours, of which 128,121 were killed.
The number of confirmed cases in India - currently the second largest in the world after the United States - has exceeded 8.6 billion.
What is Diwali and why is it celebrated?
Meanwhile, the New Delhi High Court ordered the authorities to take the growing coronavirus virus as people ignored masks and anti-social policies.
The Delhi government says the number of cases is estimated to rise to about 12,000
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