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Bitcoin touches Rs 10 lakh in India

Rajesh Bhayani/Mumbai 07 Dec 17 | 06:10 PM

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris (Photo: Reuters)

The price in India of bitcoin, the crypto currency, touched Rs 10 lakh this afternoon, when its price on major global exchanges crossed $15,000. It was $13,000 on Wednesday evening.

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While prices are rising sharply ahead of the launch of futures in this on US exchanges, the bitcoin community believes several hedge funds are preparing to short-sell it when derivatives trading begins on the CBoT and CME. CBoT bitcoin derivatives trading is beginning this Sunday; CME is launching it on December 18. These sources don't rule out buying by these hedge funds in the cash market to prop prices now and later short on the CME.

According to the bitcoin community, the medium-term outlook is bullish. However, exchange traded derivatives have shorter settlement and, hence, hedge funds will be able to reap short-term gain in shorting, while their long-term bets in holding bitcoin will remain with them.

With the price rising to $15,202 this afternoon and total bitcoin mined so far is 16.72 million, this takes the bitcoin market capitalisation to $254 billion. The total crypto currency market cap has crossed $400 bn, the bitcoin share at 63.5 per cent; it was 55 per cent a month before.

The reason for a 50 per cent jump from $10,000 to $15,000 in less than a month is several new investors, especially wealthy ones, taking interest and buying it. India alone has seen a sharp increase in investor interest in recent months. Zebpay, the largest exchange's app download for bitcoin trading, has crossed the two-mn mark, of which the second million happened in the past three to four months. Investors who have downloaded apps might number more than three mn.

On South Korea's oldest exchange, Korbit, it was trading at $17,725, a premium of 21-22 per cent, indicating demand there is much higher. However, local media reports say the regulator there will ban the launch of futures in bitcoin.

Saurabh Agrawal, co-founder of Zebpay, says: "With Bitcoin touching new highs of $15,500 and trading in India at Rs 10,000,000, it has attracted a whole lot of new players in the market. Earlier, people came to Zebpay due to the curiosity factor but with the price going north, the digital currency has attracted institutional players and high net worth individuals; it has become an alternative investment for people. Also, with futures being launched, we are anticipating some major institutional investors coming into the bitcoin eco-system. This year has seen bitcoin touching newer highs and we see growing interest in crypto currency from all quarters in India."

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