Cryptocurrencies are highly unstable and volatile. Their price keeps rising and falling every week and keeps the investors under serious risks, especially those who believe in the Islamic Sharia Law. An Islamic scholar has just declared that Bitcoins are permissible under the Sharia Law. This statement has opened the market to 1.6 billion Muslims all over the world. This also explains the sudden increase in the Bitcoins price by more than $1000.
When the rest of the world began adopting the new currency, the Muslims around the world were forbidden to invest their money in the crypto-currency market. However, recently this new information was released by an Islamic scholar named Mufti Muhammad Abu Bakar. He published a paper in which he has addressed the issue of Bitcoin and other cryptocurrencies that whether or not they are halal. Muhammad Abu Bakar said, “In Germany, Bitcoin is recognized as a legal currency and therefore qualifies as Islamic money in Germany. In countries such as the US, Bitcoin lacks official legal monetary status but is accepted for payment at a variety of merchants, and therefore qualifies as Islamic customary money.”
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Various debates were made on this topic by the Islamic Scholar community. Although the Islamic Sharia Law prohibits usury. The practice of lending money at high-interest rates and Bitcoin trading is volatile and involves huge profits and loss. The paper also states, “Bitcoin is permissible in principle as bitcoin is treated as valuable by market price on global exchanges and it is accepted for payment at a wide variety of merchants.”
This assumption is purely speculative and many believe the price surge was due to the crypto market finally opening to 23% of the world’s population. This can be considered reasonable especially considering that Bitcoins price is often swayed by the third parties. According to experts, Bitcoin is here to stay and this adoption of the crypto by the Muslim world is another step in the right direction towards mainstream adoption. Soon after the paper was published, over one billion dollars in trades were initiated across all exchanges of the world. This caused a sharp increase in the price of Bitcoins over a very short duration.