Several industry spokespersons representing Indian crypto exchanges have given a thumbs-up to the move.

“The introduction of a Bitcoin ETF is — undoubtedly — an encouraging factor, contributing to the growing belief in this asset class. Since crypto is borderless, the SEC’s ETF approval will impact overall market sentiments. In the immediate term, the focus is on Bitcoin’s price, which has surged over 60% since early October,” said Sumit Gupta, Co-founder of CoinDCX.

Indian investors ‘ participation in foreign stock and ETF markets is regulated by the Reserve Bank of India’s Liberalised Remittance Scheme (LRS). Under this scheme, investors from India can allocate up to $250,000 for investments, including in US ETFs.

However, despite the encouraging words, Indian investors have much more to consider amid repeated words of caution given recently by the Reserve Bank of India (RBI) governor and Finance Minister Nirmala Sitharaman.

So, investors continue to grapple with the question of whether they should invest in this cryptocurrency or not. There are numerous reasons for intending to invest in bitcoins.

Reasons investors in India can consider investing in bitcoins:

1. The cryptocurrency is borderless, and the decisions taken by the US regulator will see their impact on the prices, acceptability, and cash inflows worldwide.
2. Several investors will be incentivized to earn quick bucks in short-term trading by selling the rallies when the price starts moving upward.
3. Although cryptocurrencies are not legal in India via any explicit set of regulations, they are not illegal either. The government even rolled out a 1 percent TDS and capital gains tax on virtual digital currencies (VDAs) in 2022, thus setting the tone of legitimacy and regulatory framework.
4. India investors can invest in bitcoin ETFs via the Liberalised Remittance Scheme (LRS).

Nevertheless, the jury is still out on this when it comes to making hay while the sun shines on cryptocurrencies.

Reasons Indian investors may not want to invest in bitcoins:

1. The approval of spot ETF is given only by the US markets and does not apply to Indian crypto exchanges. Although Indian investors can invest via LRS, not everyone would want to take that path.
2. By their very nature, cryptocurrencies are highly volatile. And so are bitcoins. They fluctuated wildly and touched $68,789 in November 2021.
3. They are not yet regulated in India, and the overall sentiment for their regulations is unfavorable. RBI Governor Shaktikanta Das has issued statements condemning the mania of bitcoins.

No wonder experts continue to bat for regulatory clarity over bitcoins before investing in them.

“It may be prudent to await clear regulatory developments before considering investments in cryptocurrencies. Launching a Bitcoin ETF was anticipated to inject billions into the crypto economy. Still, we’ve witnessed a trend of investors liquidating their holdings, causing prices to hover around $47,000, far from the peak price of $60,000. It is recommended to prioritize regulatory clarity over Wall Street events, as the latter may not fully capture the essence of ddecentralizedBitcoin,” says Gaurav Mehta, CEO and co-founder of Catax – Simple Crypto Taxes.