The crypto market has been in the grip of a bear market because of the current global economic slowdown. The Indian crypto industry has had its unique problems with respect to taxes, regulations and banking access. This has led to a dramatic fall in volumes in all Indian crypto exchanges. The crypto industry operates in cycles and the bear market is inevitably followed by a spectacular bull market.
The cryptocurrency market continued to slide in the month of September, which has historically been the worst month for Bitcoin. Ethereum completed its long-anticipated transition to a proof-of-stake consensus mechanism, but it wasn’t the bullish catalyst Ethereum investors had hoped for.
Ethereum completed the transition to the merge on Sept. 15, but investors saw the transition as a “sell the news” event. In the two months leading up to Ethereum’s conversion to proof of stake, Ethereum prices were up 32%, compared to a 2.8% decline in Bitcoin over that same period. After the merge, Ethereum prices tumbled 18%, while Bitcoin prices only dropped 1.9%.
The Indian crypto exchange WazirX fired 40% of its staff. A total of 50 to 70 employees of the 150 workers at the exchange were asked to go, CoinDesk reported. The laid-off employees were informed that they would be paid for 45 days and that they would no longer be needed to report for work.
Looking ahead to October, Wall Street is focused on inflation, interest rates and the forex market. Economic uncertainty in the U.K. sent the pound tumbling to new lows against the U.S. dollar in late September.
As new tax rules have forced many crypto enthusiasts to maintain distance from the cryptocurrency industry, India’s adoption rate of cryptocurrencies is likely to drop at a concerning rate in the second half. India may lose the no. 1 status in Asia’s top cryptocurrency market as 30% capital gains tax came into effect in India’s Crypto Market.
The US is expected to come up with the crypto regulations and the Biden White House released its first framework outlining the future of U.S. crypto and digital asset regulation in September. The directives may serve as guidelines for regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission as they look to implement official rules to protect investors and reduce illegal activity in the cryptocurrency space.
According to a fact sheet released by the White House, the U.S. Treasury is expected to complete an “illicit finance risk assessment” on DeFi and non-fungible tokens in the first half of 2023.
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