Demonetization is a process of invalidation a currency’s status as legal tender. Demonetization mostly takes place after changes of national currency, when the former form of money is pulled from circulation and is replaced with new type of coinage. Demonetization can have a huge impact on a country’s economy, especially when that country is strongly cash-dependent. Demonetization also has an impact on Bitcoin and other cryptocurrencies. Citizens can massively turn to cryptocurrencies when the country performs demonetization wrongly and loses the trust of the population. The relationship between demonetization and Bitcoin became an important topic after India’s demonetization of 500- and 1000-rupee notes, as Bitcoin grew substantially after the demonetization and cryptocurrency exchanges stated that Bitcoin showed increased demand in India.