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The price of the bitcoin, a popular crypto currency, crossed its 52-week high on Friday at $774. The surge was seen initially after Donald Trump won the US presidential election early this month and now because of China putting controls on capital outflows, including quotas for importing gold. Chinese investors found solace in bitcoin as a safe heaven taking its price to 52-week high. A similar rising trend was seen in India soon after demonetisation of the currency on November 8.
Bitcoin prices in India have risen faster than international prices in the past few weeks. Usually, Indian prices were quoted at 3-5 per cent premium to international price as in India supply has always been limited. However, last week-end, bitcoin price on Indian exchanges was traded at Rs 69,000-70,000 per bitcoin, which was its all-time high price.
Last week, the Indian price was quoted at nearly 40 per cent premium to international price. At that level, according to the CEO of one of the bitcoin exchanges in India, at a very high price, some profit-booking led to reduction in premium to 18-20 per cent as of now. When international market is quoting around $754, bitcoin in India is quoted at Rs 60,000. Jaspreet Singh, partner (cyber security) at EY India, said: “One reason for the surge in bitcoin usage is recent demonetisation of India currency by the government of India.” While the Indian exchanges don’t accept cash, bitcoins seem to be a safe haven when other avenues such as gold are not looking viable.
The bitcoin demand also got traction when a week ago EY (one of the Big Four accounting firms) announced: “Clients of EY Switzerland will be able to settle their invoices for auditing and advisory services using bitcoin. The advisory firm also put into operation a bitcoin ATM at its publicly accessible office building in Zurich. This ATM can be used by EY employees as well as passers-by to exchange Swiss francs for bitcoins and vice-versa.” This is first time an accounting firm has acknowledged bitcoin as a medium to make payment for its services.
Bitcoin exchanges in India are in single digits and bitcoin mining in India is also not much while China is considered to be its biggest mining hub and trading centre. In India, however, now people are forming a pool to mine bitcoins. GBMiners is southeast Asia's largest bitcoin mining pool and it is backed by Amit Bharadwaj.
Four months ago, bitcoin prices crashed after one of China’s largest bitcoin exchanges was found hacked and a huge quantity of bitcoins were stolen. The hack was not in a Blockchain but in wallets where investors park their crypto currency. They are advised usually to move currency to their Blockchain account. Blockchain is a public ledger where all transactions are traceable.
EY India’s Jaspreet Singh said, “This increasing public attention did not go unnoticed by cyber criminals who have already started unleashing bitcoin-mining malware. The term ‘bitcoin-mining malware’ is used to refer to malware that cyber criminals use to instal bitcoin miners in users’ systems. These allow cyber criminals to utilise systems’ computing resources for their own gain. Most bitcoin-mining malware arrives via malicious downloads or through social media. Exploitation of system and/or application vulnerabilities may also lead to infection.
With attacks getting more sophisticated each day, cyber criminals will continue to find ways to monetise their malicious activities and more of such attacks will surface and become evident as the value of bitcoin rises.
