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The Worst Year For Bitcoin, Ethereum; Is This Beginning of The Fall of Cryptocurrency?

2022 was the worst year for America Cryptocurrency, Bitcoin, Ethereum, and Polygon have plummeted multiple times in the current calendar year. In India, cryptocurrency exchanges have also been raided by authorities. Experts say the cryptocurrency decline will continue in 2023 due to systemic problems in the crypto world.

Bitcoin, the leading private cryptocurrency, plunged about 65% this fiscal year to $16,833 on December 23, 2022. Similarly, Ethereum plunged about 68.15% year-to-date to $1,221 on Dec. 23, compared to his $3,834 on Jan. 1, 2022.

Polygon or MATIC was at $2.56 on January 1, 2022 and plummeted to $0.80 on December 23, 2022.

In 2022, all cryptocurrencies witnessed high volatility, with 70-80% swings between their highs and lows for the year.

Vivek Iyer, Partner and Leader (Financial Services Risk), Grant Thornton Bharat, said: While this issue may be new to the crypto industry, it is an age-old problem where liquidity risk exacerbates solvency problems. ”

He added that the cryptocurrency industry needs to make a conscious attempt towards governance to rebuild the trust deficit caused by the series of unfortunate events.

Regarding the outlook for 2023, Iyer said, “The systemic problems in the crypto world have not been fully The currency will experience a decline for some time.”

FTX, the world’s top 5 cryptocurrency exchange, is facing a liquidity crisis, with CEO Sam Bankman-Fried (also known as SBF) telling investors that the company could pull out up to $8 billion. previously said it faces a shortage of Request and urgently need funds. FTX and its sister trading firm Alameda Research filed for bankruptcy last month, dissolving his virtual trading business that was once valued at $32 billion in the market. It rocked the cryptocurrency world and brought prices down significantly.

On the tax front, Clear founder and CEO Archit Gupta said:

In the 2022 Budget, Finance Minister Nirmala Sitharaman will impose a 30% tax (plus applicable surcharges and 4% excise tax) on profits made from trading cryptocurrencies after April 1, 2022. introduced Section 115BBH to impose This does not take into account losses. Offset your tax liability.

Private cryptocurrencies have declined this year, but experts say India It has the potential to grow into a blockchain hub outside the US market.

“India has the potential to grow into a blockchain hub outside the US market,” said Archit Gupta. The use cases for the technology will grow.”

RBI Governor Shaktikanta Das said Wednesday that the biggest concern about private cryptocurrencies like Bitcoin and Ethereum is that they have no fundamental value and if they are allowed to grow, He said the next financial crisis would come from them. He said these assets should be banned.

Das has also hit cryptocurrency hard in the past. He also said these digital assets could create a lot of financial instability regarding the ability of central banks to determine monetary policy.

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