There are examples in history of mad speculations. They draw a number of investors. The Dutch tulip mania happened between 1634 and 1637. It was trading in tulip bulbs. Prices soared everyday. It was a frenzy. The price rise attracted more investors, and that escalated the prices further. The rise was 200 times in a month. The rare varieties were priced even higher.

The bubble burst finally, It bankrupted so many. Crypto mania too could lead to the same fate. The RBI governor warns that in crypto the underlying is not ‘even a tulip.’

Bitcoin reached the dizzying heights of $60000 to $65000. Even now it is at $35000. Even other cryptos have risen dramatically. The budget tax of capital gains aims to discourage crypto trading. The RBI feels cryptos are a threat to financial and macroeconomic stability.