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Bitcoin Poised to End Week off Weekly Highs Despite Expectations of Indian Adoption

June 23, 2017 at 21:22 by Yahia Barakah

The price of Bitcoin is set to end the week below the week’s highest level as investors in the virtual currency remained reluctant to place their funds into it in the wake of a recent $900 crash. Rumors of a possible adoption of Bitcoin in India resulted in little to no effect on the price of the digital currency today, but is expected to have a wider effect in the weeks to come.

After almost touching $3,000, the Bitcoin price crashed to $2,120 last week. The digital currency then quickly recovered to $2,789 by Wednesday, but volatility remained high as the price moved in a range of almost $150 over the past two days. This volatility prompted experts to reiterate warnings of the bubble behavior that Bitcoin has been displaying in recent months, which is attributed to a frenzy of speculations that pushed the Bitcoin price more than 200% this year.

Among those wary of Bitcoin’s rapid gains is Peter Denious, one of the main venture capitalists in Aberdeen Asset Management. In a recent interview, Denious said that Bitcoin is pushed higher by a gold rush mentality that took over the market, which is likely to lead to huge losses of investments.

His concerns along with others have worked against allowing Bitcoin to break the $2,800 level this week, despite easily storming past it last week. Reports that pointed to a possible legalization of the virtual currency in India failed to lead it higher as investors preferred to remain cautious.

India has seen a huge rise in demand for Bitcoin over the last year, but the country continues to offer no legal framework for digital currencies to operate within. However, lawmakers in India might be in talks of changing the government’s stance on Bitcoin to with the goal of regulating the currency. The Ministry of Finance formed a committee in April to examine the existing framework surrounding virtual currencies and provide suggestions for how to improve consumer protection and limit money laundering.

The committee’s findings and recommendations will be submitted to the ministry by the end of July. This has stoked anticipation of a possible adoption of Bitcoin in India, especially after the Indian government opened a public discussion of the issue on its official online forum.

government official said that the probability of banning Bitcoin is low, however he also added that legalizing the virtual currency remains unlikely. Speculations on the committee’s recommendations are expected to influence the Bitcoin price in the coming weeks.

BTC/USD reached 2,721.1 on the Bitstamp exchange as of 20:50 GMT on Friday after moving within a range between 2,688.9 and 2,743.9. BTC/USD started the day at 2,708.3, while for the week the pair began trading at 2,633.9.

If you have any questions and comments on bitcoin today, use the form below to reply.

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