Bitcoin crosses $100,000 milestone: Should Indians invest in crypto now?

For the first time ever, Bitcoin has crossed the $100,000 mark, buoyed by a combination of political developments, institutional investments, and changing global regulations.

 

Factors behind the crypto rally

 

Experts attribute the milestone to several factors, including the re-election of Donald Trump as US president and his administration’s pro-crypto stance. Edul Patel, CEO and co-founder of Mudrex, pointed to Trump’s nomination of Paul Atkins as SEC chair as a key driver. "With Trump fulfilling perhaps his most important campaign promise to the crypto industry, the confidence in his administration delivering on other promises such as creating a dedicated White House crypto policy role and a Strategic Bitcoin Reserve has grown substantially," Patel said.

 

 

Balaji Srihari, business head at CoinSwitch, added that Trump's policies, combined with institutional investment, have created strong momentum. "The re-election of Trump has reinvigorated enthusiasm within the crypto community, supported by a significant uptick in institutional investments. BlackRock’s spot BTC ETF has surpassed 500,000 BTC in assets under management, equating to $48 billion. With the US embracing pro-crypto policies, other countries are also moving favourably. China has now lifted restrictions on personal crypto ownership, and countries like Brazil and Russia are considering Bitcoin for reserves, signalling its growing global economic role."

 

Should Indians invest in Bitcoin?

 

Indian investors are now viewing Bitcoin as a viable option for wealth creation. Thangapandi Durai, CEO at Koinpark, said, "Bitcoin's recent breakout above $101,000 is an undeniable milestone. For Indian investors, this is a prime opportunity to recognise that cryptocurrencies offer substantial capital appreciation potential. Bitcoin, often referred to as ‘digital gold,’ provides a hedge against inflation while serving as a store of value."

 

Durai added, "If someone had bought 5 Bitcoins in 2013, they’d be sitting on massive profits today. Back then, Bitcoin was priced around $1,000, and now, it’s breaking past $101,000. Those who believed in Bitcoin back then have reaped returns of over 100x. It just goes to show – risk favours returns, and bravery gets paid."

 

He also spoke about Bitcoin’s future. "Bitcoin is far from hitting its peak. It won’t stop at $100K – this is just the beginning. Who knows? It might even reach the moon or Mars. The future of Bitcoin looks bright, and those who continue to believe in its potential will likely see even greater rewards in the years to come," Durai said.

 

Risks and market volatility

 

Experts warn investors to approach cryptocurrencies with caution due to market volatility and regulatory uncertainty. Purvang Mashru, senior quantitative research analyst at 1 Finance, advised, "Investors should conduct proper research and not view cryptos as a shortcut to 50x or 100x returns within months. A disciplined, long-term approach is necessary to navigate this evolving space."

 

Kavitha Kanaparthi, founder and CEO of Soulverse, echoed these sentiments. "The constant growth of decentralised assets lies in global economic trends, investor confidence, and the broader adoption of blockchain as a whole. Market swings can occur in either direction, and preparation is key."

 

Analysts optimistic about Bitcoin

 

Despite potential risks, analysts remain optimistic about Bitcoin's trajectory. Srihari said, "Reaching the $100,000 milestone is monumental for Bitcoin, signalling that a return to the record highs of 2021 is achievable—if not immediately, then eventually. Over the past month alone, Bitcoin has surged by 50%, with its market cap crossing the $2 trillion threshold and delivering a 144% year-to-date return."

 

He further explained that Bitcoin’s halving events could trigger additional growth. "Based on historical post-halving performance, analysts project that Bitcoin could reach a peak of around $150,000 in 2025. If the past is any indicator, the April 2024 halving could spark a rally of 300–400%, aligning with this forecasted target. However, in this dynamic environment, investors must stay informed about market developments to make confident and well-informed decisions."

 

Kanaparthi added, "The price increase of 36% in Bitcoin seems to be the result of a collective sigh of relief post-US elections. It does help that the incoming president appears to have pro-blockchain ideation, which the world will be watching closely once he takes charge in January 2025. Growth sustained by strong fundamentals will define the market’s path forward."

 

Bitcoin’s new milestone reflects its evolving role in the global economy, while serving as a reminder of the opportunities and risks associated with cryptocurrency investments.

 

How are cryptocurrencies taxed in India?

 

India’s tax policy treats cryptocurrency profits similarly to speculative gains.

 

“The taxation framework complicates matters,” Sahil Arora, partner at Saraf and Partners explained. “A 30% tax on gains coupled with TDS means traders are heavily taxed. The Prevention of Money Laundering Act (PMLA) applies if transactions involve undeclared funds or overseas assets without proper disclosures.”

 

“Non-declaration of crypto earnings constitutes an offence under PMLA,” said Dinesh Jotwani, co-managing partner at Jotwani Associates. “Every crypto transaction must reflect in the taxpayer’s returns. Failure to disclose can lead to prosecution, especially if tainted funds are used or assets are acquired overseas without Reserve Bank of India (RBI) approval.”