Rakesh Jhunjhunwala not alone in avoiding Bitcoin party, D-Street experts feel the same

Bitcoin’s gains have been fueled by signs it is gaining acceptance among mainstream investors and companies, from Tesla and Mastercard to BNY Mellon, said a Reuters report.

The volatility in Bitcoin is something that makes it unstable and not fit to be used as a currency. Large fluctuations in Bitcoin which often are in double-digit makes it highly unpredictable.

"I won't buy Bitcoin even for $5. In the world, only the sovereign has the right to create currency. The dollar move of 1-2 percent is news but here the fluctuation is 10-15 percent in a day, hence the speculation is the highest,” said Jhunjhunwala.

He further added that “I don't want to join every party in the town. You should go to the party which you like. I will never buy Bitcoin in my life. cryptocurrencies should be banned.”

Also Read: Bitcoin: Should you invest in this cryptocurrency?

The only genuine crypto assets are tokens or crypto-currencies which are asset-backed. However, so far, Bitcoin or all the other popular crypto-currencies are not asset-backed.

“Cryptocurrencies are not asset-backed, but rarity is being touted for some of these. But, with more than 4000 crypto-currencies and the ability to launch an infinite number of them, we don’t see why any particular cypto-currency can be worth anything without any asset-backing,” Vikas V Gupta, CEO & Chief Investment Strategist, OmniScience Capital told Moneycontrol.

“This is the same flaw as in fiat currency which they are trying to decry. In fact, fiat currencies or traditional INR and USD etc. are backed by the GDP of the country while crypto is backed by nothing,” he said.

Jay Thakkar, VP and Head of Equity Research at Marwadi Shares and Finance Ltd told Moneycontrol that cryptocurrencies are not widely accepted globally like any other currencies, so till there is no full-fledged acceptance of it like that of Dollar or INR or EURO or GBP

“I don't think including it in the portfolio for diversification makes sense,” he said.

Cryptocurrency ban will be unprecedented:

The government's stand on cryptocurrency has confused stakeholders in the industry, as some of the arguments forwarded by them, defeats the very purpose of the currency. Data suggests that 7-8 million Indian people invest in crypto.

In response to a question in the Rajya Sabha, Finance Minister, Nirmala Sitharaman, said that while an Inter-Ministerial Committee will study the issues and launch a new crypto bill, all private cryptocurrencies, except any virtual currencies issued by the government, will be prohibited in India.

Govt Bitcoin defeats purpose, say experts

“Crypto as an asset class has given good gains. But in the Indian context, we still need to remember that the government & RBI has not yet given legal status to this asset class. So it is a fine line,” Nitin Shakdher, Professional Investor and Founder & CEO, Green Capital Single Family Office told Moneycontrol.

“Probably a wait & watch approach and see the developments on this space. Traditional assets like equity will still hold a larger portfolio allocation,” he said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.