oppn parties Panic Sets In As Crypto Ecosystem Gets Battered

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  • Delhi chief minister Arvind Kejriwal, referring to a spate of FIRs for putting up posters in Delhi which said "Modi Hatao, Desh Bachao", said that even the British did not act in such manner
  • The 2023-24 Appropriation BIll, which allows the government to spend Rs 45 lakh crore in the fiscal, was passed by Lok Sabha in 9 minutes without any discussion
  • Sources say that Amritpal Singh fled to Haryana and may now be in Uttarakhand
  • Experts say that Rahul Gandhi's disqualification from Parliament will kick in immediately as the conviction has not been stayed
  • Tatas to invest $2bn in super app Tata Neu
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  • Government will define quality norms to ensure better 5G service
  • Stocks tumble again on Thursday after two sessions of recovery: Sensex loses 289 points to 57925 and Nifty goes down by 75 points to 17076
  • Amicus curiae and senior advocate K V Vishwanathan has told the Supreme Court that the changes made in law and three extensions given to the present director of Enforcement Directorate are illegal and will imperil the integrity of the agency
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  • ISSF Cup shooting: Indian pair of Rhythm Sangwan and Varun Tomar win silver in 10m sir rifle mixed team event
  • WPL: UP Warriorz take on Mumbai Indians in the Eliminator today. The winner will play Delhi Capitals in the finals
  • World Boxing: Four Indians - Nikhat Zareen, Nitu Ghanghas, Lovelina Borgohain and Saweety Boora - enter the frinals in their respective category
  • Bombay HC imposes costs and dismisses a petition by a housing society that sought to have a community-wise cap on residents
  • Delhi Police files 159 FIRs for defacement of public property and 49 for posters saying 'Modi Hatao Desh Bachao'
Rahul Gandhi disqualified from Parliament, Wayanad Lok Sabha seat declared vacant
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Panic Sets In As Crypto Ecosystem Gets Battered

By A Special Correspondent
First publised on 2022-07-08 15:38:16

Crypto platforms worldwide are facing strong headwinds. The market crash has left them bleeding and a few have closed down while some others have stopped funds withdrawal by subscribers leading to a panic situation in the market. Luna-Terra stablecoin had collapsed in May, Vauld has crashed (Nexo is in talks to acquire it), crypto lenders Celsius Network and Babel Finance have suspended withdrawals and a host of exchanges have stopped crypto transactions. Investors have lost money and even the staunchest followers have turned sceptics.

In India, crypto exchanges, already hampered by lack of clarity in regulations (in April, several exchanges had stopped accepting deposits through UPI citing lack of  regulatory clarity) and suffering the effects of the market crash, have reported a huge plunge in trades ever since the new tax regime kicked in on July 1. Investors are spooked that payouts above Rs 10000 will now attract deduction of tax at source (TDS) of 1%. The quantum of tax is not much but this will mean that all these transactions will now come under the tax radar. Further, the maximum rate of 30% has been imposed on capital gains from crypto transactions which will work as a negative factor.

On top of this, the RBI governor has been issuing periodic statements warning investors that they should steer clear of something that does not have an underlying value. The crash in the market (Bitcoin has lost almost 70% from its all-time high of $69000 in November 2021 and the market capitalization of crypto assets has plunged to $1 trillion from $3 trillion in November 2021) has meant that a large number of investors have lost big money. Although die-hard fans would see in the crash an opportunity to make fresh investments at the low value, this is not happening because crypto lenders are facing liquidity crisis due to losses suffered by investors and even the die-hard fans are having second thoughts.

Indian crypto exchanges are reporting a fall of as much as 70% in trading volumes since the beginning of July. As the news of crashes around the world comes in, panic will also spread in the Indian market. Since crypto does not have an underlying, the pricing is solely based on sentiment and market euphoria. Since the financial markets worldwide are in a bind right now, crypto has also crashed. But while the traditional financial markets will recover due to the intervention of central banks and governments worldwide, the same cannot be said of crypto. The domino effect is likely to lead to more closures and the panic will scare away investors. The emerging scenario is not looking good for crypto, at least not in the short term.