Spot bitcoin ETFs: Can Indian investors make hay while the sun shines?
Soon after spot bitcoin ETF was approved by the US markets regulator Securities and Exchange Commission (SEC), there has been a surge in the bitcoin price. On Tuesday, the bitcoin was trading at $42,837, 1 percent higher.
Several industry spokespersons representing Indian crypto exchanges have given a thumbs-up to the move.
“The introduction of a Bitcoin ETF is — undoubtedly — an encouraging factor, contributing to the growing belief in this asset class. Given that crypto is borderless, the SEC’s ETF approval will impact overall market sentiments. In the immediate term, the focus is on Bitcoin's price, which has surged over 60% since early October," said Sumit Gupta, Co-founder, CoinDCX.
Participation in foreign stock and ETF markets by Indian investors is regulated by the Reserve Bank of India's Liberalised Remittance Scheme (LRS). Under this scheme, investors from India can allocate up to $250,000 for investments, including in US ETFs.
However, despite the encouraging words, Indian investors have much more to consider amid repeated words of caution given by the Reserve Bank of India (RBI) governor and Finance Minister Nirmala Sitharaman in the recent past.
So, investors continue to grapple with the question as to whether one should invest in this cryptocurrency or not? There are numerous reasons for intending to invest in bitcoins.
1. The cryptocurrency is borderless and the decisions taken by the US regulator will see their impact on the prices, acceptability and cash inflows around the world.
2. When the price starts moving upward, a number of investors will be incentivised to earn quick bucks in the short term trading by selling the rallies.
3. Although cryptocurrencies are yet not legal in India via any
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