As the price of SegWitCoin (BTC) steadily approaches its former glory (at $10,800 at the time of publishing), market enthusiasts are speculating when the public will take notice the price will go parabolic again. As traders are looking for an edge, a lot of eyes have turned to India, where the price is trading at a premium, as much as $500 higher than the average price worldwide.
Probably more as a cheerleading effort than anything else, Binance’s CEO Changpeng Zhao (CZ) tweeted about India’s situation specifically, noting that banned assets increase in value.
The situation in India is particularly suited to driving up the price of an asset like BTC. As The Bitcoinist notes, price disparities can happen in worldwide cryptocurrency markets, and it can be exacerbated by several factors that India is currently experiencing. India is currently experiencing growing inflation and a bad debt situation, two factors that would encourage Indians to dump their rupees for digital currencies.
On top of that, the government is reportedly discussing banning digital currencies in an effort to protect the rupee. It is very likely that in a few months, it will be illegal for Indians to buy BTC.
CZ doesn’t understand the relationship between the situation on the ground and the desire for BTC, and his assessment that banning something makes it more desirable is flat wrong. Using another product that have been banned at one point in history, alcohol was popular before it was banned in the U.S., and although popular wisdom holds that prohibition didn’t work, studies have shown that alcohol consumption reduced considerably for decades after prohibition was repealed.
BTC isn’t alcohol, but we can follow a similar train of thought.