Recent weeks have been reminiscent of the 2013-2014 Bitcoin explosion for many Bitcoin enthusiasts. Though it’s nothing like going from under $200 to over $1000 in just 2 months, the steady climb back to $1000+ has been encouraging. For many regular people around the world who have yet to use Bitcoin, recent weeks have been a swift introduction. In India alone, major Bitcoin exchanges such as Zebpay and Unocoin have reported a surge in user registration and trading volume since November, at least doubling registration and trading volume from previous months.
This is all coming off the heals of Indian Prime Minister Narendra Modi’s November 8th decision to withdraw all 500 – 1000 rupee notes from the Indian economy. With 86% of India’s in-circulation cash being made worthless overnight, it’s not surprising that people are quickly looking for alternatives to spend and store their hard-earned money.
In a recent article on the topic of India’s economy and Bitcoin, Forbes tells us that, “with India’s recent demonetization, the volume of bitcoins being traded there has substantially increased to nearly two times its prior levels”. Furthermore, “Data from the ministry of electronics and information technology shows that the number of daily transactions through e-wallet services . . . has shot up from 1.7 million — recorded on November 8 when demonetization was announced — to 6.3 million as of December 7.” That number has continued to rise into the new year, with no signs of slowing down!
Today however, Thursday, January 5th, the stability of Bitcoin was called into question when we got a bit of a surprise from CoinDesk’s Bitcoin Price Index (BPI). Bitcoin dropped by nearly $200 in just 1 hour, though it quickly began to recover. However, volatility such as this is part of the reason Bitcoin has struggled historically to go mainstream with consumers and investors.
CoinDesk released a statement regarding the unexpected dip in the BTC trading price. “Today’s price move raises the question of whether the rally that began last month will continue into the new year – or if we’re in for a repeat of 2013-2014, when bitcoin peaked and quickly fell.”
CoinDesk offered some additional perspective from Chinese bitcoin exchange Huobi, stating that “current trading volume is 37x of that in 2013 and bitcoin price fluctuates 15.95%, which is much more stable than the year 2013.” The Huobi rep goes on to explain that “in 2013, when the price was 8,000 yuan (around $1100), the weekly trading volume was 393,000 BTC, with an amplitude of the week up to 103%. The trading volume was very small. Today, bitcoin [prices] broke 8,000 yuan with 735m BTC trading volume, which is expected to double in a week.”
With all this excitement about Bitcoin, it’s easy to forget that there are plenty of other ways to spend, store and transfer money online. Digital wallets, phone apps and various UPIs have seen growth explosions in India since November 8th, and they’re following a global trend that has money going digital more and more each day.