Bitcoins hit a 3-year-high, more Indians take to cryptocurrency

By Rachal Chitra & Ranjani Ayyar

CHENNAI: Trump's love for all things Russia and Putin has had an unexpected effect on bitcoins, which surged to a three-year high. The cryptocurrency crossed the $1,000 on January 1and is currently trading at $990.87, bouyed by positive sentiment. Since, Russia has the second largest market for bitcoins after China, US President-elect Donald Trump's perceived friendliness towards the rival nation has spurred punters to bet big on cryptocurrencies in the New Year.

Bitcoins have risen 54% since November 8 ($709.2) when the US election results were announced. The demonetisation announcement in India also did its bit in popularising the use of alternate payment mechanisms in India. Investors like Chandresh Dedhia made a clean profit from their bitcoin trade.

“When Trump won, I made substantial profits. I used that to buy more bitcoins, when the price fell to a six-month low in the next 20 days,“ said Dedhia, CIO, Fermenta Biotech. With demonetisation, Dedhia has started using bitcoins to buy books off Amazon, recharge his phone, buy gift vouchers and movie tickets.

“Two years ago, I had to explain to people what a bitcoin was. Today , people are more aware and we have over 1.27 lakh users. Just in the last two months, those numbers have doubled,“ said Sathvik Vishwanath, co-founder, Unocoin, which is backed by the likes of Blume Ventures, Boost VC and other international investors.

Digital currency and payment network Unocoin is one among the many players in India like Zebpay , BTCXIndia and Coinsecure. Industry experts said that the current surge is more sustainable, given that bitcoin prices in the last one decade have been highly volatile. Unocoin, which has tied up with over 2 lakh merchants worldwide, sees 200-250 trades a day . From flight tickets, bus tickets to vouchers from e-comm giants eBay , Flipkart, Snapdeal, Unocoin gives alot of options to its users.

The frequency with which bitcoins are being used in everyday life has forced investors to do a serious rethink on the perceived “volatility and quicksilver“ nature of currency markets. “Investors, VS firms are hand-picking blockchain and bitcoin startups. They have started soliciting us, instead of we having to prove worth,“ said Toshendra Sharma, CEO, Recordkeepers, an IIT-Bombay incubated startup.