Following regulatory discussions in India on a possible crypto ban, traders are panic selling on major crypto exchange WazirX. This has caused a drastic price drop for leading cryptocurrencies, including Bitcoin (BTC) and Ether (ETH).
The price of leading cryptocurrencies on the Indian crypto exchange crashed right after parliament announced the introduction of 26 new bills in the Winter Session, including the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
According to a Tuesday publication by the parliament, the bill is awaiting a vote from the legislative for the creation of an official digital currency and a potential ban on “all private cryptocurrencies,” starting on Monday.
This triggered a massive sell-off on WazirX on Wednesday morning at 3:30 am UTC. The price of Bitcoin dipped from nearly 4,600,000 Indian rupees ($61,820.73) to 3,917,659 rupees ($52,650.55), a 14.8% drop within two hours.
Other popular tokens, including Ether and Cardano (ADA), also experienced similar price depreciation on the local exchange.
According to the CEO of the exchange Nischal Shetty, India’s crypto market usually trades at a premium compared to the global market. As such, the panic selling caused a correction that has forced the prices in the Indian market to reach the global level. He advised Indian investors to have faith in the lawmakers, urging them not to panic.
Commenting on India’s crypto ban, BTC Markets CEO Caroline Bowler said:
This ban won’t work in the long-term and would be a step backwards […] banning is not an option to protect investor interest […] The thing with cryptocurrency is that while governments may try to ban it or try to contain it, the very decentralized nature of the technology somewhat prohibits that.
Indian blockchain investor Evan Luthra agreed with Bowler. The young entrepreneur believes that soon enough the Indian government will have no option but to accept and deal with cryptocurrencies citing El Salvador's rapid infrastructure development amid Bitcoin's mainstream adoption.
It happened with the public first, then the banks and now the government will also need to learn and deal with cryptocurrencies in a future of metaverses.
India is currently one of the largest crypto markets in the world with over 20 million investors. A representative from the Reserve Bank of India said in August that the central bank is planning on commencing preliminary trials for a central bank digital currency before the end of 2021.