The soon-to-be President of the United States of America, Donald Trump, has selected the tech billionaire Elon Musk to head a new Department of Government Efficiency (DOGE) of his incoming administration. The Republican Vivek Ramaswamy will join Musk in the project, abbreviated by the DOGE of Musk’s cryptocurrency, Dogecoin, his favorite one. The acronym for the brand-new position, which found a spot in an official Trump statement, is, in one way or another, a good sign of the positive messages the President-elect was sending throughout his campaign around cryptocurrencies, such as announcing bitcoin as a strategic reserve and favorable energy policies for crypto miners. Since Trump came to power, bitcoin has shot to the sky and almost reached six figures.
Whether Trump was president or not, the prediction among investors was that bitcoin would reach that level as his campaign was mainly pro-crypto. Musk – who has been a long-term follower of cryptocurrencies – joining the team as a major adviser will increase investor confidence that cryptos are the future of money even if there are some concerns about the conflict of interest. Bitcoin’s surge since Trump’s. As a result of this, the Indian crypto ecosystem has been thrust into the spotlight. Taxation issues have dragged it down, and general uncertainty about the future of such currency in the country and the hacking-induced draining of a large part of the cryptocurrency reserves of one of the country’s biggest exchanges has caused recent cybersecurity concerns.
The bitcoin surge
A large increase in bitcoin occurred Tuesday night, reaching above $90,000 for the first time, albeit the cryptocurrency has since moderated its spike to a trading price of around $73,000 at the time of publication. Thus, because of that, the November 5 elections were held in the US, and on Tuesday, the cryptocurrency reached more than 30 percent. Further, not just bitcoin, but on Tuesday, Dogecoin saw a surge of over 20 percent and has grown by more than 150 percent since Trump’s victory in early November.
Compared to Bitcoin’s 30 percent. Dogecoin, called ‘memecoin’ in the digital currency world, is currently the sixth-largest cryptocurrency by market capitalization. Memecoins are often evidence of retail investors’ enthusiasm for digital currency. Typically, it is a barometer of how risky investors can behave at any given point. Typically, the rising memecoin prices came from the participation of retail investors in the market.
How India could see the bitcoin surge
The crypto experience for India has been a bumpy ride, and perhaps investors in the country might not be as interested as those in America because of such issues as high taxation of incomes through cryptocurrencies and the overall banking sectors’ rather not-so-kind outlook toward the asset. The Central Board of Direct Taxes submitted an inter-seminar draft to the Ministry of Finance in India in Dec. 2018. That resulted in the RBI banning the banks from dealing with cryptocurrencies a month later, which had to be dismissed by the Supreme Court of India in 2020.
Notwithstanding this, it has been vocal in its opposition to cryptocurrencies, branding them as a “macroeconomic danger.” With effect from July 1, 2022, the finance minister noted that the RBI had called for a prohibition employing “international collaboration,” i.e., “any effective regulation or ban” on cryptocurrency, as the digital currency is redundant in nature in the parliament. Bitcoin’s surge since Trump’s. The government had imposed 2022 a tax of 30 percent on everyone who would get any kind of income from selling any virtual digital asset, together with a 1% tax deduction at source (TDS) on each transaction.
Could see the bitcoin surge
Nevertheless, a paper that was developed by the International Monetary Fund (IMF) and the Financial Stability Board (FSB), at the request of the Indian G20 Presidency last year, called for licensing crypto service providers, along with the caveat that a total ban on them is not very effective since cryptocurrencies operate across borders. Due to the recent upswing in cryptocurrencies, Bernstein, in a recent note, asked if India can, one has to think now, “ignore Bitcoin.” It is worth noting that the related issue in India is that the use of crypto is an area suffering from extreme differences between the two models of central bank digital currencies (CBDCs) and the private crypto used by the government.
Yet, the note asserted that India’s trajectory from providing digital payment solutions to its citizens to a country with a CBDC would be the “next logical path.“ However, the note also emphasized that Indian investors had not discovered the great potential of Bitcoin, which they defined as a private currency. It also mentioned that cryptocurrency can be a method for governments to create reserves. “India has de-risked the custody of gold employing the transference of almost 100 tonnes of gold from the UK back to India. Bitcoin is digital gold and, therefore, a means for governments to accumulate reserves in the digital space, they will be independent from the countries that actually physically hold gold, whereas the international community is unpredictable and US fiscal policies put at risk dollar-denominated reserves,” the Bernstein note added.
In Summary
After Donald Trump won the presidency, Bitcoin had a spike. People worldwide, including India, were beginning to show an interest in cryptocurrencies. This interest rose as investors thought Bitcoin could be a safe place for their money when there were political and economic uncertainties. Also, in India, a demonetization issue affected people’s savings. Bitcoin’s surge since Trump’s time, the Indian government and the reserve bank were not so positive about Bitcoin due to its wild price swings. This led to a tough space for Bitcoin to get investors while facing regulation hurdles.
Also Read: Why has Bitcoin Experienced a Decline Today?
FAQS
How does Elon Musk’s involvement with DOGE impact cryptocurrency markets?
Elon Musk, a well-known advocate for digital currencies, particularly Dogecoin, is expected to bring confidence to crypto markets. His position in DOGE could encourage broader acceptance of digital assets and align with pro-crypto policies, boosting investor interest.
How has Bitcoin reacted to Donald Trump’s election win and the formation of DOGE?
Following Trump’s win and the announcement of DOGE, Bitcoin surged to over $90,000, reflecting increased market optimism. Trump’s pro-crypto stance has been associated with investor excitement about the potential for favorable crypto regulations.
What implications could this have for India’s cryptocurrency market?
The announcement has brought renewed attention to India’s crypto ecosystem, which faces challenges like high taxation and regulatory uncertainty. With global crypto leaders advocating for the asset class, there may be pressure for India to revisit its restrictive policies on cryptocurrencies.
How might DOGE’s formation influence the regulatory environment for cryptocurrencies in the U.S. and globally?
The establishment of DOGE under Trump, with Musk’s involvement, signals a potential shift toward more crypto-friendly policies in the U.S. This could encourage other nations to reassess their regulatory stance, especially if the U.S. adopts a proactive approach to digital asset governance.
