As Bitcoin price falls, is cryptocurrency still worth buying? | Mint – Mint

The onslaught of crypto winter and recent events have marred the spirits of crypto investors. Various events like the recent breaks in operations where Vauld (a leading crypto exchange platform) paused the withdrawals and called off their operations, Voyager Digital (a crypto broker) filed for bankruptcy, the collapse of Luna crypto and many such cases across the world are shaking up the investors.

Archit Gupta, Founder & CEO Clear says the price of Bitcoin, the first and most prominent crypto, rose to $68,000 in November 2021. Shortly after, it nearly halved in price to $35,000 and continued to decline. Today it stands at around $21,000. This tells us of the volatility and speculations in the crypto markets. Given the macroeconomic environment, market volatility, and mass exodus of investors from the market, the scales of demand and supply are heavily tipped, accelerating the risk even further.

To top it all, the new tax rules add to the woes of the investors. The government announced that 1% TDS must be deducted on all crypto transfers over 10,000. These tax rules will increase the regulatory and compliance burden. The tax rules have further increased the challenges as they may lock up the required liquidity to revive crypto markets," said Archit Gupta.

He added that given how people invest in crypto with little knowledge and more influence, one must appreciate these regulations as they will only help secure investors money.

Vikas Singhania, CEO, TradeSmart says apart from TDS, the brokerage, and GST charges have added more risk to trading in cryptocurrencies.

The TDS of one percent on Cryptocurrency implemented from 1st July is a dampener for trading in the asset class. While it may not affect investing volumes, trading volume in the sector will be surely hit. Just an example of how it will impact the trader -If a trader takes 10 trades in a month, he will have to earn at least 10 percent on these trades cumulatively, just to recover the TDS cost," said Singhania.

"On top of it, the brokerage, and GST charges have added more risk to trading in cryptocurrencies. Whatever residual profits are left will now be subjected to capital gains and other charges, making a profitable living off cryptocurrencies more difficult for investors," he said.

Meanwhile, Bitcoin-the world's largest and most popular cryptocurrency- was trading at $19,925, down more than 3%. Bitcoin is more likely to tumble to $10,000, cutting its value roughly in half, than it is to rally back to $30,000, according to 60% of the 950 investors who responded to the latest MLIV Pulse survey. Forty percent saw it going the other way. Bitcoin has already lost more than two-thirds of its value since hitting nearly $69,000 in November and hasnt traded as low as $10,000 since September 2020.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Read the original:
As Bitcoin price falls, is cryptocurrency still worth buying? | Mint - Mint