What Happened? Why Did Bitcoin Drop So Suddenly?
Although calling it a “drop” might sound dramatic given the recent highs, Bitcoin has indeed experienced a significant dip. Let’s say it “corrected sharply.”
One major reason is that India is considering a ban on cryptocurrencies. Yes, one of the world’s largest economies is drafting a bill that would criminalize possession, issuance, mining, trading, and transferring crypto assets.
How does that sound to you?
If you remember, we’ve discussed several times that the main enemy of crypto is regulators. And we should expect hits from them.
Well, here we are. The proposed legislation aligns with the Indian government’s January agenda, which called for banning private virtual currencies like Bitcoin while laying the groundwork for its own official digital currency.
My links: https://linktr.ee/rundalya
Remember, we talked about this. To quote myself:
“Cryptocurrencies for regulators are like a kind of opposition outside the system. And no authority favors an opposition outside the system.”
What’s Next?
Most likely, not much will change immediately. It’s possible that in the near future, “brave adventurers” will once again attempt to conquer the 60k peak and the heights beyond.
A real turnaround in this market will occur not after gentle words from Janet Yellen about the speculative nature of crypto, but after regulators worldwide launch a real crusade against this “beast,” accusing it of being the main “money laundering machine” of modern times. And they will propose what they consider a worthy alternative — system-based digital currencies.
My links: https://linktr.ee/rundalya
We are not there yet, but it’s coming. So far, only China has taken the lead.
System-based cryptocurrencies are unlikely to answer the main question: how to escape the system of total control? Because they are part of that very system…
This was written about three weeks ago. Everything is going exactly according to plan.
Importantly, despite the government’s threats of a ban, transaction volumes in India are growing, with an estimated 8 million investors holding crypto investments worth 100 billion rupees ($1.4 billion). There is no official data.
It’s interesting to see which other regulators will follow the Reserve Bank of India’s footsteps and how soon this will happen.
Overall, this can be seen as a strong hint to those who decided to keep their savings in crypto: The current setup might change drastically, or the window might close altogether. Think ahead.
My links: https://linktr.ee/rundalya
Why is the Ruble Rising?
The reason is simple. The ruble is strengthening situationally ahead of upcoming taxes and risks of monetary policy tightening.
Like with China, the market fears monetary tightening. There are also hopes for an increase in export revenue sales before paying large March taxes.
To be more precise, the March tax period started on Monday. The volume of payments and disbursements may jump by 80% compared to February due to final settlements on corporate income tax for the last year (due on March 29), averaging 2.7 trillion rubles.
I was tempted to close the second half of my short position on the dollar at 72.8 yesterday evening. However, I decided to hold off, believing that the ruble’s strengthening potential is not yet exhausted.
However, this period of ruble growth might not last long. Let’s not forget that we will soon be “pleased” by some friendly neighbors. This might provoke some additional flight of investors from our ruble debt and, naturally, hit the ruble. Again, the Ministry of Finance has allocated a significant amount under the budget rule to prevent excessive ruble strengthening.
My links: https://linktr.ee/rundalya
But, currency inflows are currently quite substantial. And no matter what anyone says, the ruble should objectively be trading 10–15% higher. The economy dictates its terms 😉
In the near future, we expect a tightening of Russian monetary policy. I anticipate a rate hike by the Central Bank in three days by at least 50 basis points. We’ll see how all these factors will affect the ruble.
One thing is certain. In the next 2–3 weeks, the ruble is likely to “fly” a bit, albeit in different directions.
Rundalya,
Xoxo
@rundalyaelf ♬ original sound – mills 🎀
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