Wealthy Indians Embrace US Bitcoin ETFs Amidst Regulatory Caution
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Wealthy Indians Embrace US Bitcoin ETFs

In a notable shift in investment behavior, affluent Indians are increasingly turning to United States’ spot Bitcoin Exchange-Traded Funds (ETFs) to diversify their portfolios. They’re leveraging the Reserve Bank of India’s Liberalized Remittance Scheme (LRS) to achieve this purpose.

Since the approval of US spot Bitcoin ETFs on January 10, a surge in demand has been observed among Indian investors, mainly through platforms like Vested Finance. These platforms have reported substantial buy volumes exceeding $5.3 million, indicating a robust appetite for cryptocurrency exposure.

The attraction towards US Bitcoin ETFs lies in the tax advantages offered by the LRS, which allows citizens to remit up to $250,000 annually. This contrasts India’s taxation regime for cryptocurrencies, which imposes a flat 30% tax on profits and a 1% TDS on trading. Such high taxes have incentivized many investors to seek offshore options.

LRS Crypto Tax Benefits

Furthermore, Viram Shah, CEO of Vested Finance, stated that approximately 70% of ETF traders are high-net-worth individuals drawn by the tax benefits it provides through the LRS. Despite warnings from the Central Bank of India against trading cryptocurrencies, wealthy Indians are capitalizing on the opportunity to diversify their investment portfolios and gain exposure to the booming cryptocurrency market.

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The interest in US Bitcoin ETFs shows a growing trend among Indian investors to explore offshore investment avenues, particularly in cryptocurrency, where regulatory frameworks may be more conducive and taxation benefits more favorable. While the adoption of US Bitcoin ETFs by wealthy Indians signals a shift in investment behavior, it also raises questions about the efficacy of India’s regulatory stance towards cryptocurrencies.

Bitcoin Halving Impact Already Priced In – Marathon CEO

Meanwhile, Fred Thiel, CEO of Marathon Digital, believes that the expected surge in Bitcoin’s value post-halving has already been priced in. While speaking during a recent interview, Thiel stated that the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States has played a pivotal role in accelerating BTC’s recent price surge.

Hence, he argued that the influx of capital into the market after the ETF approval has effectively front-loaded the anticipated gains typically associated with Bitcoin halving events.

Market Divided Over Bitcoin Halving Impact

Meanwhile, BitMEX co-founder Arthur Hayes has expressed a contrasting prediction, foreseeing a potential downturn in Bitcoin’s price both before and after the halving event. This difference in opinions spotlights the uncertainty surrounding the cryptocurrency market and the varied interpretations of its future trajectory.

Meanwhile, Michael Jerlis, CEO and founder of EMCD Mining Pool, likened the market volatility surrounding the halving to a rollercoaster ride. Jerlis emphasized the cyclical nature of price fluctuations, noting that investors often turn to alternative cryptocurrencies (altcoins) for speculative opportunities during periods of uncertainty.

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George Ward

By George Ward

George Ward is a crypto journalist and market analyst at Herald Sheets, known for his engaging articles on the latest digital currency trends. With a background in finance and journalism, he presents complex topics accessibly. George holds a degree in Business and Finance from the University of Cambridge.

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