Bitcoin to INR
We offer an easy way to compare the price of bitcoin to INR with our charts and currency exchange rate.
Bitcoin aka Internet Money aka Future of Money is the talk of the town.
If you haven’t been living under a rock for the past 8 years, you must have heard about Bitcoin by now.
Bitcoin has come a long way after debuting in 2009 when the financial crisis was still underway. Back then one Bitcoin was worth less than a dollar.
2016 was a remarkable year (and it looks like 2017 will be as well) for Bitcoin. There were some scalability innovations that took place and the price per Bitcoin reached the highest in over two and a half years.
Bitcoin in India and Demonetization
Bitcoin is a great deal for small businesses. When you swipe your card every time you shop, the store has to pay a hefty card processing fee. Those fees significantly shrink when customers shop using Bitcoin.
Also in developing countries where people don’t have bank accounts but do have phones, Bitcoins can play a major role in how people transfer money to one another.
India is a great example of this – where Bitcoin is thriving, partly due to demonetization. Though, a vast majority of India is still unaware about Bitcoin.
In a bid to fight corruption and terrorism, on November 8, 2016, Prime Minister of India Narendra Modi shocked the nation by demonetizing Rs. 500 and Rs. 1000 currency notes – sparking a new interest in the digital currency and other cashless mechanisms such as internet banking, digital wallets, credit cards etc.
The demonetized notes amounted to 86% of India’s cash in circulation. India is a country where 87% of transactions are done in cash. Chaos was inevitable.
This resulted in long queues at the ATMs and banks for weeks. There was not enough cash with the banks to dispense. People holding cash could deposit their money in the bank accounts or exchange for new Rs. 500 and Rs. 2000 notes before 30 December.
People who were hoarding “black money” (unaccounted cash) could not deposit money into their accounts because banks were keeping a close eye on suspicious deposits.
What options do these people have? Let go all of their money? Well some of them did exactly that. Old notes were found floating in the river.
While others turned to look for commodities to hedge the risk of an economic slowdown; some bought gold, some bought silver.
What did government do to curb this? They started raiding gold jewellers. When gold wasn’t working, people were buying silver which significantly increased the demand of silver.
Interestingly Fergal O’Connor, a senior lecturer in Finance at the University of York (my alma mater), stated that a 10% reallocation from gold jewelry investment to silver could double world silver demand, which could cause a drastic change in the silver market.
With gold and silver being targeted by authorities, these souls saw Bitcoin as a safe haven. Using their connections and by paying up to 30-35% premium they started buying Bitcoins with cash.
Bitcoin price started to surge and weekly volume of bitcoin trading nearly doubled.
As compared to other countries like the US, the UK and China where the total Bitcoin trade value is around Rs. 10,000 crore per day, India still lags at Rs 500 crore (per year) with 700-800 Bitcoin traded every day.
Not to forget, India is one of the largest remittance markets with a total value of more than $70 billion. On this a user usually pays up to 15% in bank charges and conversion fees. This is where Bitcoin’s true potential lies.
Sandeep Goenka, founder of Zebpay, one of the largest Bitcoin exchanges in India, said that post demonetization his exchange is now adding about 50,000 new users per month and the queries have gone up by 30 percent.
He said, “We hail the unprecedented move by PM Modi’s vision for a cashless and corruption free India. More people have started looking at Bitcoins and interest has surged. We are working hard so that Bitcoins and this technology can help fulfill the government’s dream.”
Unocoin, another India’s leading Bitcoin exchange said the average number of daily visitors to its website has spiked to 14,000, compared to roughly 4,000 prior to demonetization.
“We are seeing an increased demand for Bitcoin and India clearly has shortage of supply, making the demand and lack of liquidity push up prices of Bitcoin as compared to global exchanges” said Mohit Kalra, CEO, Coinsecure.
As mentioned earlier, countries like the US and China with large liquid Bitcoin markets, can lead the global price, but when a smaller market experiences a big change it doesn’t trigger a global effect, and it creates arbitrage opportunities.
Before demonetization, Bitcoin prices in India were hovering between $866 to $896 per Bitcoin; with 18 days after demonetization the prices surged from $757 to $1020.
The demand in India was so high that Indian Bitcoin price was nowhere close to rest of the world’s. It was trading at $100 premium on Indian exchanges creating huge arbitrage opportunities.
Lots of people in the know that had bank accounts in India and the US took advantage of the situation. They bought Bitcoins in the US and sold them in India making a decent profit.
To understand how Bitcoin may progress in India it will be beneficial to know the role gold plays in Indian society. An American couple’s most valuable asset is typically their home, income and education. An Indian couple’s possession of gold touches on all these areas.
It is fair to compare Bitcoin to gold, as they both are liquid commodities. Bitcoin as a result can be seen in the middle of fiat currency and gold – only lacking the cultural weight that gold has.
After two months of demonetization circus the situation looks under control. Bitcoin prices have also settled down to normal. But experts believe these arbitrage opportunities will come again.
All we have to do is wait and watch the crazy Bitcoin price fluctuation. The real impact of demonetization will be long term. The initial growth that most of the Indian exchanges have seen is mainly due to cash crunch.