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As the crypto world remains surrounded by mostly negative news, there has been a global meltdown in investment in the once-bright sector. Indian investors, too, seem wary, some of them reassessing their exposure and others completely withdrawing until they could make sense of the volatile situation.
Already on shaky ground, after several digital coins began losing their value a few months ago, the collapse started earlier this month when Binance CEO Changpeng Zhao announced his exchange was liquidating all FTX tokens. Last week, FTX filed for bankruptcy, and several others have suspended withdrawals.
Bitcoin, the most popular and largest crypto by market capitalisation, has lost about 15 per cent in value in the past week, according to CoinMarketCap, a market research website. It was trading at $16,757.08 at the time of writing this report. Ethereum, too has lost a similar valuation in the same period.
The Economic Times reported that many Indian investors began investing via such international exchanges after the government made the crypto taxation rules stricter. However, the current uncertainty has forced them to reassess their position vis-a-vis the crypto industry.
"We don't know what kind of shady dealings these exchanges are involved in with our funds," Ashwin Nadar, a Mumbai-based crypto investor, told ET. "Except Coinbase and Robinhood, all other exchanges are suspect until they get audited by an independent firm and publish it."
Chahal Verma, another crypto investor, said she had been warning investors for months not to trust any crypto exchange. "When you store your crypto on exchanges, they hold your key, not you. And anything can happen since the space isn't regulated. We have seen bankruptcies due to their incompetence, hacks and what not," she told ET.
But not everyone is disheartened by the rout. Some crypto experts say this phase is temporary and good for weaning the sector away from poor business practices.
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First Published: Tue, November 15 2022. 13:49 IST