What are your thoughts on the massive crash in crypto?
AUM wise, crypto is not very big in India but participation wise, it has gone up significantly.
What would be the indirect impact on other asset classes due to the crypto crash?
As I said, AUM wise, crypto is not really too big in India today but participation has gone up significantly over the last six months. I do not think there is any direct risk from crypto crash on the Indian market but the other issue here is the price is coming down so much that it is going to be a temptation for people who are already invested to average down their costs. A lot of people would have got in the last two-three months at higher prices. It would be very tempting for them to buy more to lower the average cost.
People have to remember that crypto is a very risky asset class and I do not think anyone should be having more than 1% or 2% exposure, if at all, to crypto. We had seen similar action last time in Yes Bank. When the stock came down, people came in and they bought more and then it kept going down. It just takes one large move to get a lot of people sucked into it.
Those who trade in crypto, have to keep in their mind that the exposure to the asset class should not be too much because it is just too risky right now.
What do you believe is likely to be the long-term outlook for this currency?
I unfortunately or fortunately do not have a view or have any exposure to crypto. I do not understand the asset class at all. I do not know if I am qualified to make a comment on the direction but one thing for sure, it is an extremely risky asset class. So, folks who are getting in just need to make sure there is not too much exposure.