As the festive season is upon us, two of India’s biggest stars are going to promote a new asset this season. Crypto platforms CoinSwitch Kuber and CoinDCX have roped in Ranveer Singh and Amitabh Bachchan, respectively to promote cryptocurrencies in India.
Cryptocurrency companies often approach popular faces who have the star power to entice customers into opting into the ecosystem. Bachchan and Singh join the likes of international celebrities like Kim Kardashian, Snoop Dog, Jamie Fox, Paris Hilton, Floyd Mayweather and others who have directly endorsed cryptocurrency-related products.
While cryptocurrency occupies a legal grey area in India, the Centre and the Reserve Bank of India have frowned upon its wider adoption. The Centre is currently in the process of introducing a bill to regulate cryptocurrencies in India.
The International Monetary Fund (IMF) in its Global Financial Stability report has also highlighted the risks of national adoption of cryptocurrencies.
But India is quickly emerging as one of the largest markets for cryptocurrencies in the world. More than 10 crore individuals own cryptocurrencies in India, reveals a study by portal BrokerChooser.
Industry trends reveal that there is a high level of penetration of digital currency in tier II and tier III cities in India apart from the metros. Some of these users are trying to make crypto their first investment class.
“Digital assets have caught everyone’s attention not only because it has emerged as the best asset class of 2021 but also because other asset classes are not able to fulfil the aspiration of the smart investors who want their money to grow in tandem with global growth rate," Shivam Thakral, CEO of cryptocurrency exchange BuyUcoin, told Mint.
A previous study by Chainalysis showed India ranked second out of 154 countries on the 2021 Global Crypto Adoption Index. According to the report, India’s cryptocurrency market grew 641% over the past year.
“It looks like digital assets have become a choice to beat inflation," Jay Hao, CEO of global crypto exchange OKEx.com, told Mint.
Cryptocurrencies like Bitcoin, which often have no underlying value of their own, are frequently compared to gold as an investment commodity. Both commodities attract attention from investors for being anti-fiat assets, and thus immune to the effects of inflation on various currencies. But while gold has gone down by over 6 per cent in the previous year, Bitcoin has risen up by more than 400 per cent in the same time period.
With Bitcoin trading at upwards of $55,000 for the first time in months, further gains are expected in the highly volatile asset. It is this volatility that turns away many would-be investors from Bitcoin to safer avenues of investment like gold. But celebrity endorsement may be able to change quite a lot of minds.
Many of these endorsements and advertisements occur due to regulatory loopholes. In the case of India, with cryptocurrency not being recognised as a financial product, its advertisements and promotions are not monitored according to the rules set by the Securities Exchange Board of India, and neither the Advertising Standards Council of India (ASCI).
(Edited by : Anilkumar Narayan)
First Published: IST