25.03.202114:34 Forex Analysis & Reviews: India to criminalize bitcoin ownership. Central Bank of Norway urges its citizens not to join bitcoin hype

The number one cryptocurrency in the world has started a new round of correction, and, from our point of view, this round was logical and should be stronger than the previous ones. The problem for bitcoin right now is that the fundamental background for this cryptocurrency has deteriorated dramatically. If in January-February, market participants were ready to carry money to cryptocurrency exchanges to buy any number of coins simply because Elon Musk or Tesla does so, now many investors believe that bitcoin is already too expensive to buy at current levels. As we have already said, no asset can rise in price forever. And such an asset as bitcoin may well fall by 80-90 percent at any time. So why buy it now at $55,000-$60,000 per coin, if you can wait for the next drop and buy it much cheaper?

This may be the logic of large investors and institutions. Moreover, it was reported last week that miners no longer believe in further growth of the bitcoin in the current cycle and are ready to get rid of their stocks. As we said earlier, the sale/purchase of a relatively small number of coins (up to 10,000) can cause a 1% change in the exchange rate. Thus, if all the miners rush to sell bitcoin, the rate can sink very seriously. Moreover, the fall of bitcoin will cause a chain reaction in the markets and a "domino effect". Small traders and investors will definitely start to immediately get rid of their stocks, fearing to lose profits. Only institutions and large investors who can afford to keep bitcoin in their portfolios for many years can resist its fall.

Meanwhile, authorities in India want to completely ban the mining, storage, transfer, and trading of digital currencies. According to Reuters, a bill is already under development that would criminalize all of the above transactions with bitcoin or its counterparts. If this bill is passed (and there is no doubt about it), then all owners of cryptocurrencies will receive about 6 months to liquidate their assets. Thus, India may become the first country with a large economy to completely ban the circulation and storage of cryptocurrencies. However, many experts have already stated that this will not affect the owners of cryptocurrencies themselves because a piece of code can be stored anywhere, and how the Indian government is going to track the movement of bitcoins and interpret the transfers of "digital money" in foreign accounts is not yet clear. The main thing is that some countries are slowly beginning to declare war on bitcoin.

At the same time, the governor of the Central Bank of Norway, Oystein Olsen, said that bitcoin is "too unstable and expensive", and also urged the people of Norway not to use bitcoin as a means of storage and payment. Olsen does not believe that digital money can displace fiat money, which is controlled by central banks. "The main task of the central bank, as well as its currency, is to ensure the stability of money and the system, and bitcoin does not perform these functions," Olsen said in an interview with Bloomberg. Also, the governor does not believe that bitcoin will pose a threat to central banks.