With Bitcoin absolutely destroying its previous support and reaching a high of nearly 63,000$, the news has received incredible coverage throughout all platforms. This news even reached print media, whatsapp forwards, and hallowed pages of YouTube influencers. More recently, in India, national dailies now feature a daily snippet of the BTC price alongside USD, EUR, GBP, etc. This is the indication of a new revolution for blockchain and cryptocurrencies in India. Yet, upon considering our first-hand experiences with adults who hold a major amount of the investable capital, the picture may or may not be that optimistic.

Consider this, Indian families belonging to a middle-income household, would have known only the path of savings and maybe Fixed Deposits in Banks, especially banks owned by the Government, for a safe and risk-free investment. This mindset comes for a savings-oriented and cash-driven culture which a majority of Indian families still pass on to their children. Indian women are infamous for keeping stacks or wads of cash hidden in the household. 

Another favourite investment for Indian families, is gold, consider the women of India hold up to 21% of the global gold supply. (https://m.dailyhunt.in/news/india/english/windowtonews-epaper-wintonws/indian+women+have+21+of+total+gold+in+the+world-newsid-100950051). Any extra income or windfall instantly is converted into gold and then that gold is HODLed away in some vault or safe inside the house for next generation wherein that gold will be passed on with the male or female progeny of the household. Hence, these investment options were never meant to give any kind of returns or profit per se, rather they were to perform a safe-keeping function for the wealth and that it reaches the future generation while preserving some sense of financial safe-guard in terms of a nest-egg.

BITCOIN = DIGITAL GOLD?

The meteoric rise of bitcoin since Satoshi Nakamoto first put out the white paper, to today, has caught the eyeballs of every person interested in material wealth. The constant comparisons to gold is because of few factors, most importantly, store of value and limited supply. These are the reasons due to which BTC has even become legal tender in El Salvador! (https://www.reuters.com/world/americas/el-salvador-approves-first-law-bitcoin-legal-tender-2021-06-09/)

This can be seen in 2 ways. Firstly, that maybe its just a one-off that a country which goes ahead to make a cryptocurrency legal tender, because it has no native currency of its own. (El Salvador runs on the US Dollar). Hence, making BTC legal tender does not really signal a paradigmatic shift from dirty fiat to digital currency.

The other perspective is what every crypto shiller would repeat, that its the sign of the changing tides, that fiat is finally losing its grip over the global financial system and crypto is making inroads, one financial system at a time. Since bureaucracy, legistlation and technology rarely ever move at the same pace, it would be interesting to see what else unfolds.

DESI CRYPTO UNDERSTANDING

Coming to India, the Government loves banning stuff. They went ahead and did ban crypto in 2018, which was reversed by the Supreme Court of India (https://indianexpress.com/article/technology/tech-news-technology/supreme-court-strikes-down-ban-on-cryptocurrency-trading-in-india-6298798/). Recent signs also indicate through the latest RBI circular which does not allow banks to use a out-dated order for refusing to transact with crypto exchanges and ask customers to refrain from doing such transactions, the signs are positive. But I would always take them with a pinch of salt considering a wide section of our political system would not be able to understand the ramifications of crypto, unless it serves their purposes. This means, till the point where political parties cannot figure out how to get donations in crypto, high chances are that it will not be accepted, or be tightly regulated like Arms licenses.

Then comes the average Indian investor, these individuals come from middle-class families, have a smartphone and 10-6pm job which pays peanuts. These overworked young men and women look to cryptocurrencies for a semi-risky yet potential investment option as compared to the stock market which is not that easy to get into without proper advice, unlike crypto. Most of the wealth which is sitting idle, is held by the parents of these individuals who would not even touch a cryptocurrency if it was dressed in sugar syrup and dipped in milk for one simple reason. "It's all in the computer right? Then it's not real." says everyday aunty, HODLing her 1 crore inheritance in low-interest fixed deposits. 

What then is required, is a dynamic shift in investment and spending behaviour to stimulate the crypto market, as India can be a goldmine for crypto projects as well as can benefit where governance and data systems are weak in social welfare, healthcare, hospitality, and industry. That depends on the political class as well as the social awakening of the youth that crypto is not the future because it gives mad sats, but that it can change the way we govern ourselves and view our wealth. Till then, if you're an Indian, HODL away on foreign crypto exchanges and not Indian ones, because as I was writing this, the owners of one of India's biggest crypto exchange (WazirX) were summoned by the Enforcement Directorate on FEMA charges (https://www.businesstoday.in/current/corporate/users-seek-clarification-wazirx-after-eds-fema-notice/story/441426.html).

So stay safe and HODL away! Cheers!