I was watching the launch of the Electric 2 wheeler the other day and something struck me. I picked up my phone and texted a Jeweller friend "I expect Indians to start selling Gold and invest in Crypto for next 10 years"
You must be wondering what Electric 2 wheeler has to do with Gold or Crypto. Let me explain. EV revolution has just begun in India. India imports Crude oil worth more than 100 billion dollars every year. By 2030, we can expect every 2nd vehicle on road to run on either electricity or an other alternate energy like green hydrogen. This can save India billions of dollars in crude oil imports. With 'Make in India' and 'Atma Nirbhar Bharath' schemes and incentives India has the potential to be alternate energy and automobile hub for the entire world. This can bring in billions of dollars to India through exports. So, for next 10 years, I am bullish on Indian economy and expect India's balance of trade to improve and Indian rupee to strengthen.
A stronger Rupee will reduce price of Gold as India imports gold too and the gold price is directly linked to dollar rate. It is no secret that Indians love Gold. They will take every dip in market as a buying opportunity. What about pledged gold worth billions of Rupees lying in the Banks? Once the Gold prices start falling below Rs. 4,000 banks will either start sending notices to borrowers and start auctioning the gold. That will further speed up the fall in gold price. I haven't taken in to consideration Government's probable amnesty scheme to holders of black gold (undisclosed Gold assets). If Union Government brings such a scheme, no one can prevent a free fall in the Gold price. This can be very dangerous to the Financial sector and many banks and gold loan companies will have to pull the shutters down. Let us hope this will not happen. India imports nearly 30 Billion Dollars of Gold every year and imports can fall when Gold goes in downtrend and that can further strengthen Indian Rupee.
We need minimum of 5 years of downtrend to turn Indians from Gold bullish to Gold bearish. With stock market at 90,000+ and gold becoming cheaper every day, Crypto market will be the obvious choice for traders and investors. The day is not far when Indians start selling gold and start buying Crypto currencies which have created millions of millionaires in the last 10 years. In 2010 one could buy 20,000 Bitcoins for Rs. 1000 which is worth Rs. 7000 Crores now. People who invested Rs. 2.5 Lac in the beginning of 2021 in a Crypto
Currency called Solana have turned it in to Rs. 1 crore in less than 1 year. More than 100 Altcoins have crossed market capitalisation of 1 Billion Dollars (Rs. 7400 Crores). All these coins have helped investors to earn 100% to 1000% within a short span of few months.
Obviously these investors have become brand ambassadors of such Crypto Currency and the result is in front of you to see. Number of Crypto currency investors have grown by over 3000% in India. It is estimated that there are more than 1 core Crypto Curency Investors in India now and this number is expected to grow every day and touch 20 crores in next 5 years. Crypto regulation bill Indian government is planning to bring can increase security and transparency to Crypto trading and can only accelerate the growth of Crypto Trading in India.