After its growth yesterday, the bitcoin corrected downwards. Today, we’re seeing consolidation on the BTCUSD instrument in the region of 2620-2640. The driver for growth at the beginning of the week was the decision by India’s Inter-Disciplinary Committee to come up with a regulatory framework for the bitcoin market. A special team will be put together for the drafting of statutory acts. It’s perfectly possible that Delhi could legalise bitcoin within a matter of months. Cryptocurrencies are popular among Indians given the volatility of the rupee and the controversial monetary reforms of 2016. On Indian electronic platforms (Zebpay, Coinsecure and Unocoin), more than 10% of transactions are made in bitcoin and mining is becoming ever more popular.
The bitcoin is continuing to gain official recognition in various Asian countries. The first country to officially recognize the bitcoin as legal tender was Japan. South Korea and Malaysia could be soon to follow. Chinese authorities, however, have an ambivalent view on bitcoin. The Bank of Russia is planning to create its own cryptocurrency, with the development of a digital economy given personal backing by Russian president Vladimir Putin.
One important question is whether the bitcoin will gain recognition from Western regulators. The US Federal Reserve has been silent on the subject so far and it’s difficult to judge what kind of attitude regulators may have towards digital currencies. In some ways, cryptocurrencies are an alternative to the dollar and to the global financial system as a whole, so it’s understandable that people would treat them with caution. Recognition for the bitcoin from the Fed or ECB would give cryptocurrencies a powerful impetus for growth.