After Narendra Modi government decided to establish demonetization of high-value currencies many Indians started looking for alternative avenues for p
After Narendra Modi government decided to establish demonetization of high-value currencies many Indians started looking for alternative avenues for payments and investment. This led them to the new-age digital currencies which became highly searched and appealing. As being the largest and oldest of all digital currencies, Bitcoin is now trading at a huge premium in India.
Similar to the increased demand of bitcoins in India is the demand spike in China that happened in the past month. The dollar strengthened and the Chinese currency weakened and these two simultaneous events caused a great raise for Bitcoin demand. The marked increase reached 25% to around $750 per Bitcoin on major global exchanges.
Currently the Bitcoin prices are being 25-28% higher than the cost on Indian exchangers. The increased interest is mainly caused by government’s decision for demonetisation.
Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 banknotes would cease to be legal tender on November 8. The exact same day the leading trading exchangers Unocoin and Zebpay marked Bitcoin was priced at about Rs 52,000 and the international cost of one Bitcoin, when converted into rupee, stood at Rs 46,942. The difference between the cost and trading price came to about 10%. In contrast, the current trading price is at Rs 64,000, while the international price is around $740 (about Rs 51,000), a difference of over 25%.
CEO of Zebpay, Sandeep Goyenka already made a statement in which he said that the sudden growth of interest for Bitcoins in the country is because Indians now see the currency as an alternative and even safer investment option. They are more willing to experiment with digital currencies and they are downloading Zebpay more than ever – 50% more, to be exact. Soon after demonetisation happened Google search data show dramatic increase of the keyword “Bitcoin” amongst Indians.
Although the capital controls in India make it harder to deliver the supply, the demand is still bigger than the import, adds Sathvik. His company Unocoin’s policy is aimed towards Indians abroad who search a way to send remittances home. He suggests that the best way is to buy Bitcoin on an international exchange and transfer it to India through the blockchain technology and then sell it immediately by a Bitcoin exchange. That way when the Indian receiver encashes it, he will also get a premium and that’s not all. Through blockchain, that is essentially a transparent public ledger, the customer record will be properly done through the banking channel that eliminates all risk factors.