On the 24th of November, bitcoin and other cryptocurrencies were trading at a low price on the local exchange compared to the global exchange. Wazir X, one of India’s popular trustable exchanges, showed bitcoin’s price of $45000 or 33.5 lakh. The market value of bitcoin fell by almost 25% in a single day as the previous day’s close was 46 lakh. However, on a foreign exchange like Binance, the price of bitcoin fell only by 2.56 percent.

According to some rich sources, the decline on the 24th of November happened after the announcement of the cryptocurrency bill. The cryptocurrency bill in India will look to suspend all privately mined cryptocurrencies except a few to make people familiar with the existing technology of digital currency.

The heads of trustable exchanges have stated that higher authorities will not ban the holding of prominent cryptocurrencies like ethereum and bitcoin, which means you can continue cryptocurrency trading and holding them as an asset. Moreover, websites like the immediate profit system can increase profits in your trading journey. Let’s find out why cryptocurrency’s price on the local exchange was less in contrast to the foreign exchange.

Why is the price of cryptocurrency different?

The market valuation of digital coins on local exchange majorly trades at a premium in contrast to the foreign exchange like Binance. This fact is several influences like the inclining transaction costs, financial terrors, and market competence.

However, on the 24th of November, bitcoin and altcoins’ market value was significantly less than the foreign exchange. Undeniably, the market value of these digital currencies was restored after only a few hours, as in the afternoon of the 24th of November, and bitcoin was trading at a value of 42 lakh.

According to trustable exchanges, the dramatic price differential was mere because the market valuation on the different trustable exchanges is characterized by demand and supply. As a result, arbitrage traders made a considerable amount of profits.

Arbitrage trading refers to buying cryptocurrencies from a particular exchange at a lower price and trading them at a higher price on another exchange. So, for example, the cryptocurrency traders bought different cryptocurrencies like bitcoin and ethereum from a local exchange like Wazir X, coin DCX and sold them on a foreign exchange like Binance.

Bear in mind that the price difference between cryptocurrencies on various exchanges must be huge for cryptocurrency traders to profit from open arbitrage trading. The profit covers the transaction cost of selling the cryptocurrency on that foreign exchange.

Effects of the Cryptocurrency Bill!

Cryptocurrency price decline on the local exchange resulted from introducing the cryptocurrency bill that Lok Sabha announced. The Indian cryptocurrency industry has been waiting for this for a long time as cryptocurrencies have been unregulated in India since the beginning.

The parliament panel concluded that cryptocurrencies could become the future of humanity as an asset class, and we cannot leave these cryptocurrencies without any regulations. Devoid of regulations, cryptocurrency will lead to the financial terrors that the reserve bank of India defined recently. The prime minister of India stated that cryptocurrencies should not be in the wrong hands. Since cryptocurrencies are not part of any government authorities, they can lead to unknown money laundering.

Cryptocurrency holders and experts hoped to legalize cryptocurrency as an asset but not as a payment method. But as per the latest reports, the higher authorities will halt all private currencies and leave few cryptocurrencies. We will learn about the cryptocurrency bill in detail in the winter session of parliament held on the 29th of November.

The head of trustable exchange, Wazir X Nischal Shetty, tweeted that cryptocurrency holders should not panic as we have been waiting for this for a very long time. Indeed, we have not seen the bill yet, and we can only make expectations. The bill will be present in the public domain on the 29th of November. Till then, we can hope for the best.

The portion mentioned above describes why there was a significant difference between the price range of cryptocurrencies on the local exchange and foreign exchange.