First Mover Asia: With Finance Bill Vote, India Continues to Reckon With the Growing Crypto Industry; Bitcoin, Ether Tread Water

The expected passage of a finance bill will include a steep crypto tax that the industry says will discourage innovation and cost the country some of its technology talent; several major altcoins rise.

AccessTimeIconMar 23, 2022 at 10:38 p.m. UTC
Updated May 11, 2023 at 4:41 p.m. UTC
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Good morning. Here’s what’s happening:

Insights: The Indian Parliament's expected passage of a finance bill that includes a high crypto tax will end a seven-week debate, but at what cost?

Technician's take: Buyers remain active on pullbacks, keeping support levels intact.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis. And sign up for First Mover, our daily newsletter putting the latest moves in crypto markets in context.


Bitcoin (BTC): $42,464 -0.4%

Ether (ETH): $3,011 +0.1%

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Bitcoin, ether go sideways but other major cryptos shine

Bitcoin and ether were trading sideways but other major cryptocurrencies continued the largely bullish trend of the past few days.

The largest cryptocurrency by market cap was recently holding above $42,400, roughly where it perched 24 hours ago. Ether, the second-largest crypto by market cap, was about as flat over the same period. Cardano's ADA and Axie Infinity's AXS were the stars of the day, each rising about 10%. Popular meme coins DOGE and SHIB were solidly in the green, as was SAND.

Alternative coin prices veered mostly from equity markets, which lost momentum after a series of increases dating to late last week. The tech-heavy Nasdaq and S&P 500 were both off 1.2%.

While the jump in altcoins seemed to underscore at least a temporary appetite for riskier assets, investors also continue to watch macroeconomic conditions warily and are largely holding a more cautious posture.

The horror images from Ukraine showed no sign of ending as Russia continued its rocket and artillery attacks on major cities, even as it continued to suffer its own massive casualties and loss of equipment. In a statement Wednesday, U.S. Secretary of State Antony Blinken accused the Russian army of war crimes, although he did not mention Russian President Vladimir Putin by name. U.S. President Joe Biden arrived in Brussels to discuss NATO imposing even more severe sanctions against Russia, although German Chancellor Olaf Scholz seemed to reaffirm his country's decision not to boycott Russian energy products during a speech to lawmakers.

Scholz said a boycott could spur the loss of "hundreds of thousands of jobs" and send Germany and Europe as a whole into recession.

Brent crude oil was selling at $114 per barrel, down from a March peak of $130 but up 50% from the start of 2022.

Oanda Americas Senior Analyst Edward Moya struck an optimistic note in an emailed analysis of investment assets, including crypto, describing bitcoin's holding pattern above $40,000 as "a good thing for long-term investors. Moya said bitcoin was "performing nicely given today's risk-aversion theme."

He added: "Bitcoin should remain a sideways trade until Wall Street makes up its mind as to whether equities can continue to perform well with all the geopolitical uncertainty at hand."


S&P 500: 4,456 -1.2%

DJIA: 34,358 -1.2%

Nasdaq: 13,922 -1.3%

Gold: $1,946 +1.3%


India reckons with the growing crypto industry

Is Parliament's likely yes vote on a finance bill that contains laws on crypto taxation the end of the saga? Or is it an intermediary step, albeit a big one, until India develops its own central bank digital currency (CBDC), or even beyond?

Whatever the answer, India is reckoning with the fledgling industry's rapid growth. The country is finding, as others are worldwide, that there are no blueprints on how to regulate crypto without hamstringing the innovation that makes it special or enraging its growing number of investors and advocates.

Crypto has created its own category.

It has presented legislators in India and other countries where developers and investors have established a toehold with new challenges.

Indian Prime Minister Narendra Modi’s government seems to have adopted deterrence at least until the digital rupee arrives as the cornerstone of the country's crypto policy. The passing of the finance bill without reducing crypto taxes, which is expected later Thursday, offers yet another example of India's uncompromising stance against crypto.

On Feb. 1, India announced the stiff crypto taxation proposals – a 30% capital gains tax, a 1% tax deducted at source (TDS), no offsetting of losses, and taxation of gifts – along with its plans to launch a CBDC by the end of the financial year 2022-23. Since then, the industry had pleaded with the government to tone down its taxation policy, particularly the 1% TDS.

The government said that gains from the trading of one cryptocurrency could not offset losses from the trading of another cryptocurrency. Investors and the crypto industry have expressed disappointment with the likely outcome, which came after groups had lobbied lawmakers and tried to win public support with presentations and other activities.

Brain drain

Among their criticisms, crypto advocates have said the law will cost India some of its brightest technology minds.

This report published Tuesday supported their criticism, saying there were signs of a brain drain that was likely to worsen once the bill becomes law.


India has viewed crypto suspiciously as it has become more popular. In April 2018, the Indian central bank effectively prohibited banks from supporting or engaging in crypto transactions, although the Supreme Court overturned the ban two years later.

As prices started to climb in late 2020 and early 2021, the government softened its stance. Proposed crypto-specific regulation evolved from prohibiting “all private cryptocurrencies in India” while allowing “for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” to enabling cryptocurrency to be used as an asset but banning its use as currency or payment.

In announcing the finance bill, the government didn’t introduce this crypto specific regulation. Instead, it said it was seeking global consensus to frame regulation.

Meanwhile, reports suggested that the central bank and the Securities and Exchange Board of India (SEBI), which regulates markets, would punish violators of crypto regulations with non-bailable warrants and/or fines and jail time.

The biggest signpost of what’s to happen over the next few days is the opinion of the man who was responsible for the government’s first position on cryptocurrencies in the form of a report.

Whatever is to come, some policy experts believe Indians have a penchant for managing or making do or coming up with the craziest solutions to the darkest circumstances. They even have a word for it – jugaad!

Technician's take

Bitcoin four-hour price chart shows support/resistance (Damanick Dantes/CoinDesk, TradingView)
Bitcoin four-hour price chart shows support/resistance (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) pullbacks have been limited during the Asia trading day, suggesting that buyers could remain active above the $40,000 support level. There is room for additional upside, although resistance at $46,700 could stall the price bounce.

Bitcoin's trading volume remains low relative to prior highs, although a decisive breakout above $46,000 could encourage additional buying activity. For now, BTC remains in a month-long trading range and is attempting to reverse a four-month long downtrend.

Elsewhere, the recent outperformance in alternative cryptocurrencies (altcoins) such as ether (ETH) relative to bitcoin indicates bullish sentiment among traders. That means higher trading ranges are expected over the short term.

Important events

Avalanche Summit Barcelona: Conference for developers, researchers and makers building on the Avalanche platform.

10: 30 a.m. HKT/SGT(UTC): Commonwealth Bank of Australia and Markit Economics manufacturing purchasing managers Index (March preliminary)

1 p.m. HKT/SGT(5 a.m. UTC): Jibun Bank (Japan) manufacturing PMI (March preliminary)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

"First Mover" considered European Central Bank Chief Christine Lagarde's accusation that crypto service providers who help Russia circumvent economic sanctions are accomplices. "First Mover" spoke with Daniel Lacalle, Tressis chief economist. Tim McCourt of CME Group shared his markets analysis. Plus, decorated speed skater and Tribe Capital Partner Apolo Ohno detailed his interest in crypto, and Regulatory Reporter Sandali Handagama provided crypto mining news from Italy.


India’s Proposed Crypto Tax Rules Likely to Become Law Thursday: India’s finance bill, which includes proposed rules on taxing crypto, is set to be introduced in parliament on Thursday.

Ex-Polychain Partner Tekin Salimi Launches $125M Crypto Venture Fund: The new fund plans to convert into a decentralized autonomous organization, and involves Terra’s Do Kwon and Avalanche’s Emin Gün Sirer.

Crypto Lender Nexo Spins Out $150M Venture Arm for Web 3 Investments, Acquisitions: Nexo Ventures will be active in Web 3, decentralized finance (DeFi) innovation, NFTs, metaverse and GameFi.

Bitcoin's Correlation to S&P 500 Hits 17-Month High: The 90-day correlation between the top cryptocurrency and the S&P 500 has risen to its highest level since October 2020.

Ray Dalio’s Bridgewater Investing in Crypto Fund: Sources: It’s the first signal to date the world’s largest hedge fund is taking crypto seriously with its own money.

Longer reads

What Is ApeCoin and Who Is Behind It?: A carefully coordinated marketing campaign takes great pains to distance the new token from Yuga Labs, but the firm that created the Bored Ape NFTs appears to be deeply involved.

Said and heard

"Billions of people making their own decisions as to how they spend their time, energy and resources are the best way to allocate the world’s time, energy and resources. Bitcoin and Ethereum are tremendous new technologies that offer unparalleled opportunities to improve this allocation." (entrepreneur Eric Seal for CoinDesk) ... "I want to do everything I can in my power to stop this war. But it doesn't make a lot of sense. The average crypto user who's using some kind of centralized exchange, they’re not likely to be one of Putin’s oligarchs or to benefit from this conflict." (Dmitry Buterin in CoinDesk Q&A) ... “I have made a decision to implement in the shortest possible time a set of measures to switch payments for … our natural gas supplied to the so-called unfriendly countries to Russian rubles." (Vladimir Putin via The New York Times)


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Amitoj Singh

Amitoj Singh is a CoinDesk reporter.

Damanick Dantes

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

James Rubin

James Rubin was CoinDesk's U.S. news editor based on the West Coast.

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