In early 2022, before the recent market crash, Bitcoin and other cryptos reached a peak of $67,000.
Crypto meltdown is the term being used to describe what is happening, and it isn’t just affecting one area of the world. Earlier this month, Vauld, a crypto trading and lending company based in Singapore, temporarily disabled user withdrawals due to funding difficulties.
Voyager Digital Declared Bankcruptcy
Voyager Digital, a crypto exchange, has also declared bankruptcy. After 1 July, Huobi Thailand ceased operations. That’s not all; the number continues climbing. Back home, bitcoin firms are struggling to cope with the weight of government taxation. Taking the market’s infrastructure as a whole into account, there is no way it can survive. The entire algorithm seems shaky, and everything seems to be shivering.
To survive in the global economy, we lack a solid support system. Financial market liquidity has been stifled by taxation. “Trading volume has dropped as investors move to protect their holdings,” Raj A. Kapoor, founder of the India Blockchain Alliance research group, told FE Digital Currency.
Moreover, trading volumes across major Indian exchanges have dropped by as much as 70% due to the 1% tax deduction at source (TDS) on virtual digital assets and cryptos for transactions over Rs 10,000. Kapoor claims that this has stifled the development of the sector.
Crypto-economy Needs Government Recognition
In early 2022, before the recent market crash, Bitcoin and other cryptos reached a peak of $67,000. Back in 2020, the price was only $6,000. Several recent events, including Celcius, Luna, Axie, Vauld, and Voyger, have illustrated how vulnerable the market is to shocks and manipulation, and the potential harm an unregulated economy may cause to the public. Until the government recognises the existence of the crypto-economy and regulates to safeguard the interests of Indian investors, we will continue to see its legitimacy erode. Without government intervention, “there will be no Christmas during crypto winter,” stated Gaurav Mehta, founder of Catax- Simple Crypto Taxes. Meanwhile, Facebook’s parent company, Meta, has said it will stop supporting the crypto digital wallet Novi on September 1, 2022.
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