- News that India is preparing a bill to ban private digital currencies appears to have triggered a massive sell-off.
- SHIB and DOGE prices have plunged 20% overnight on WazirX, one of India's largest crypto exchanges.
- The pricing discrepancy between Binance and Indian crypto exchanges is driving arbitrage in Bitcoin and dog-themed meme coins.
India is working on a bill to regulate cryptocurrencies, to be presented in a parliamentary session on November 29. The news of the crypto bill has triggered fear, uncertainty and doubt among traders, triggering a sell-off on exchanges.
Indian crypto exchanges offer arbitrage opportunities to traders
A description of the Indian crypto bill was posted on the parliament's website on November 23, 2021. The bill's contents are not yet final; however, uncertainty and doubt have fueled bearish sentiment among Indian crypto traders.
The text on the website reads,
The bill also seeks to prohibit all private cryptocurrencies in India; however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
India has had a complicated relationship with cryptocurrencies in the past. In 2018, the central bank- Reserve Bank of India adopted a ring-fencing approach. The restriction on the purchase and sale of cryptocurrencies was struck down in March 2020 by the country's apex court.
According to the latest update on the bill, India is working on a national digital currency and planning to ban private digital currencies.
India's largest cryptocurrency exchanges CoinDCX and WazirX, are witnessing a sell-off. Bitcoin price has plunged over 14% on WazirX, and dog-themed cryptocurrencies SHIB and DOGE have witnessed double-digit losses.
The price drop has opened an exciting arbitrage opportunity for traders. Investors are capitalizing on the opportunity to buy altcoins on Indian exchanges at steep discounts and selling them on global exchanges like Binance.
Traders across exchanges are concerned about a blanket ban on cryptocurrency trading once the bill hits the parliament.
The ongoing phenomenon of a difference between Bitcoin prices on Indian exchanges is similar to the Kimchi premium. Kimchi premium is the difference between Bitcoin prices in the US and South Korea.
FXStreet analysts have evaluated the Bitcoin price trend and predicted a drop to $53,000.
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