Source: Mint
Context:
Amid global market turbulence, gold and silver have traditionally been viewed as safe-haven assets. However, Bitcoin has emerged as a surprising outperformer, gaining nearly 90% in the past year, and reinforcing its growing acceptance as a legitimate asset class and potential “digital gold.”
Bitcoin vs Traditional Assets
- Gold: Surged 55% over the last year, reaching a record high of $4,000/ounce; 10g of 24K gold in India now costs ₹1.25 lakh.
- Silver: Crossed ₹1.5 lakh/kg domestically.
- Bitcoin: Despite recent volatility from Donald Trump’s new tariffs on China, it remains up 90% year-on-year in USD terms.
- Indian equity indices, meanwhile, have delivered zero returns in the same period.
Global Recognition of Bitcoin
- Launched in 2009, Bitcoin evolved from a niche digital payment tool to a globally traded asset.
- El Salvador became the first country to adopt Bitcoin as legal tender in 2021.
- 2024: The US SEC approved spot Bitcoin ETFs, including from BlackRock and Fidelity.
- 2025: The US established a Bitcoin reserve using seized tokens — the first formal recognition of Bitcoin as a reserve asset.
- Deutsche Bank Research Institute predicts Bitcoin could be included in central bank reserves within this decade.
Bitcoin and Gold
- Both have limited supply — Bitcoin capped at 21 million coins.
- Both are independent of central banks and used as a hedge against inflation and currency depreciation.
- Deutsche Bank forecasts both will co-exist, with Bitcoin growing in private reserves and gold maintaining its dominance in official reserves.
India’s Regulatory Journey with Crypto
- 2013: RBI issued its first cautionary note on virtual currencies.
- 2018: RBI banned banking access for crypto entities.
- 2020: Supreme Court overturned the ban.
- 2021: Companies required to disclose crypto holdings; draft Crypto Bill proposed to ban private tokens but introduce CBDC.
- 2022 Budget: Imposed 30% tax on virtual digital assets (VDAs) and 1% TDS on transactions.
- 2023: Crypto activities brought under PMLA, mandating KYC and FIU registration.
