Mid-week crypto catchup: A look at what's happening in the crypto space

Crypto coins (Image: Shutterstock)

The world of cryptocurrency is bustling with activity this week, both at the home turf and abroad. While global stock market indices titan S&P (Standard and Poor's) added another cryptocurrency broad digital market index to its existing list of indices, taking the tally of such indicators to 8, Indian legislators further delayed the discussion on the cryptocurrency bill which was set to be presented in the monsoon session of parliament. We take a deep dive. 

S&P launches Cryptocurrency Broad Digital Market Index 

Providing a wide, comprehensive measure of tracking the cryptocurrency market, with more than 240 coins in its purview, the broad digital market index was launched on July 13. Currently down by 2.49 percent at 2,864 points, the index’s projected annual returns are over 300 percent. 

Edul Patel, CEO, and Co-founder, Mudrex, an algorithm-based crypto trading platform, welcomed the move. He highlighted that this is a positive departure from SEC's (Securities and Exchange Commission) recent denial to approve Bitcoin ETFs, which was deemed short-sighted by many. 

“The news about S&P launching a new cryptocurrency index would pave the way for trust-building between the investors and market. Regulatory authorities, the world over, would be closely following this event as it would likely open the gates to mainstream adoption. S&P crypto index would also allow greater transparency in terms of tracking the price of different cryptocurrencies with greater ease,” he explained. 

Out of the 8 indices and sub-indices that are associated with cryptocurrency, the S&P MegaCap Index has also attracted attention, for its tracks only Bitcoin and Ethereum, both crypto market leaders with 45.96 percent and 17.15 percent dominance respectively, as per CoinMarketCap.com.

The index launched on May 3, 2021, projected an alluring price return of almost 325 percent over the last year. The returns over the last 1 month (-8.45 percent) and 3 months (-30.72 percent), however, have been dismal. But with S&P’s enduring legacy of tracking various asset classes in the market, it will certainly add value and momentum to cryptocurrency investing and trading. 

Gaurav Dahake, Founder and CEO, BitBns also appreciated the move, calling it a testament to the rapidly growing and evolving digital asset market. “Most economies across the globe are opting in positively and there are a lot of structured products that are being offered in the market with banks and regulated financial institutions such as CME, Goldman Sachs, JP Morgan introducing them. Once favourable regulations are in place, similar trends are likely to be seen back home as well and we are extremely bullish to witness a thriving ecosystem in India as well,” he said.

India delays cryptocurrency deliberations, again
Seems like the Indian cryptocurrency industry will have to wait a little longer for the much-awaited cryptocurrency bill and a structured ecosystem for it, since the government, indicating different legislative priorities, has not listed it for discussion in the upcoming monsoon session of parliament. 

While the government is yet to close in on some final comments and inputs for the bill, many experts are of the view that the country will take a calibrated, moderated approach towards adopting it, allowing it to be traded like any other asset class or commodities in the market instead of an outright ban. Chances of being classified as legal tender in India are also negligible, despite positive precedents set by countries like El Salvador in the recent past in this regard. 

“The fact that there's no mention of the cryptocurrency bill among the list of bills to be presented in the parliament shows that the government isn't in a hurry to make a decision. It is a good sign and shows that our lawmakers are deliberating and understanding this technology instead of rushing into it,” opined Nishchal Shetty, Founder, WazirX. 

While some see the delay as unforeseen, many also think this delay will significantly enhance the bill in terms of stakeholder inputs and key amendment deliberations, which will further enrich the bill to offer a solid boost to the Indian cryptocurrency system. 

Sumit Gupta, CEO & Co-Founder of CoinDCX also thought positively of the delay, hoping for more collaborative and comprehensive legislation as a result."Crypto investors and entities in the country are keenly following developments on the amended Cryptocurrency Bill with excitement and high expectations. Considering the multiple rounds of discussions that have already taken place between authorities and Indian crypto entities, we are hopeful that the Bill would positively consider the collective feedback and offer an impetus to the entire crypto ecosystem in the country considering the growth potential that it offers,” he noted. 

Notably, India offers huge potential and a growing market for cryptocurrencies, given that just over the last year, investments in crypto grew from about $200 million to nearly $40 billion. 

ICICI Bank discourages using foreign remittances for crypto investments

The bank hammered another blow to cryptocurrency trades in the country by warning customers to be wary of using foreign remittances to invest in digital assets. It modified its Retail Outward Remittance Application to include a declaration stating that the purpose of the funds is to NOT invest/purchase bitcoin and other cryptocurrencies. 

In the wake of rising cryptocurrency scams all over the world and the regulatory inability to contain them, owing to ambiguous laws surrounding them, RBI, under its liberalised remittance scheme also introduced a declaration discouraging customers from investing in “units of mutual funds/shares or any other capital instrument of a company dealing in bitcoins and virtual currencies”.

The global trend of rising cryptocurrency frauds is indeed worrying, with the FTC (Federal Trade Commission) reporting around 14,000 investment scams worth $215 million in the first quarter of 2021 alone. Just last month, Haryana Police nabbed four men who were duping people in the name of transacting and investing in cryptocurrencies.