Rich rewards often entail great risks, and the same does work with the highly volatile cryptocurrency market. The uncertainties in 2020 globally resulted in a heightened interest of masses and large institutional investors in trading cryptocurrencies, a new-age asset class. Increasing digitization, flexible regulatory framework, and supreme court lifting ban on banks coping with crypto-based companies have parked investments greater than 10 million Indians within the last few year. Several major global cryptocurrency exchanges are actively scouting the Indian crypto market, that has been showing a sustained surge in daily trading volume within the last year amid a large drop in prices as many investors looked over value buying. Since the cryptocurrency frenzy continues, many new cryptocurrency exchanges have come up in the united kingdom that permits buying, selling, and trading by offering functionality through user-friendly applications. WazirX, India’s biggest cryptocurrency trading platform doubled its users from one million to two million between January and March 2021.
What’s Driving World’s Largest Crypto Exchanges to the Indian market?
In 2019, the world’s largest cryptocurrency exchange by trade volume, Binance acquired the Indian trade platform, WazirX. Another crypto start up, Coin DCX secured investment from Seychelles-based BitMEX and San-Francisco based-giant Coinbase. The crypto and blockchain start-ups in India have attracted investment of USD99.7 million by June 15, 2021, which totaled around USD95.4 million in 2020. Within the last few five years, global investment in the Indian crypto market has increased with a whopping 1487%.
Despite India’s unclear policy, global investors are making huge bets on the country’s digital coin ecosystem due to a variety of factors such as for instance
• Tech-savvy Indian Population
The predominant population of 1.39 billion are young (median age between 28 and 29 years) and tech-savvy. While the older generation still prefers to buy gold, real-estate, patents, or equities, the newer ones are embracing the high-risk cryptocurrency exchanges since they are more adaptable to them. India ranks 11th on Chainalysis’s 2020 report listing for global adoption of crypto, which shows the excitement about crypto on the list of Indian population. Nor does the less-than-friendly attitude of the federal government towards crypto or rumors swirling round the crypto can shake the confidence of the youth population in the digital coin market.
India offers the lowest priced internet on the planet, where one gigabyte of mobile data costs around $0.26 while the global average is $8.53. So, almost half the billion users are taking advantage of affordable internet access, which enhances India’s potential to become one of many largest crypto economies in the world. In accordance with SimilarWeb, the country could be the second-largest supply of web traffic to peer-to-peer bitcoin trading platform, Paxful. While the mainstream economy remains struggling from the “pandemic effect”, cryptocurrency is gaining momentum in the united kingdom as it provides the young generation a new and fast means of earning money.
The cryptocurrency craze resulted in the emergence of multiple trading platforms such as for instance WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin, and many others. These cryptocurrency exchange platforms are highly secured, accessible across various platforms, and allow instant transactions, providing a friendly interface for crypto enthusiasts to purchase, sell, or trade digital assets limitlessly. Many of these platforms accept INR for purchases and trading fees only 0.1% so simple, fast, and secure platforms present a lucrative opportunity for both first-time investors and local traders.
WazirX is one of many leading cryptocurrency exchange platforms with over 900,000 users that provides customers with peer-to-peer transaction capabilities. CoinSwitch Kuber provides the most effective cryptocurrency exchange platform for Indians and is fantastic for beginners in addition to daily doers. Unocoin is one of many oldest cryptocurrency exchange platforms in India that account fully for over a million traders through mobile applications. CoinDCX provides users with 100+ cryptocurrencies being an option to create exchanges and even provides investors with insurance to cover losses in case there is a security breach. So, global investors are eyeing the plethora of cryptocurrency exchange platforms in India to take advantage of the emerging market.
• Mixed Government Response
The legislative bill regarding a ban against a digital currency that could criminalize anyone engaged in possession, issuance, mining, trading, and transferring crypto assets could easily get enacted into law. However, Finance and Corporate Affair Minister Nirmala Sitharaman eased some investor’s concerns saying that the federal government has not planned to completely bar cryptocurrency use. In a statement directed at a respected English newspaper, Deccan Herald, the Finance Minister said, “From our side, we’re very clear that we aren’t shutting all options. We enables certain windows for individuals to accomplish experiments on the blockchain, bitcoins, or cryptocurrency.” It’s evident that the federal government remains scrutinizing the national security risks posed by cryptocurrencies before choosing putting a whole ban.
In March 2020, the Supreme court overturned the central bank’s decision to ban financial institutions from dealing in cryptocurrencies, which prompted investors to pile in to the cryptocurrency market. Inspite of the lingering anxiety about ban, transaction volumes continued to swell, and user registration and money inflows at local crypto-exchange became 30-fold from the year ago. Among India’s oldest exchanges, Unocoin added 20,000 users in January and February of 2021. The total volume of Zebpay each day of Feb 2021 got equal to the amount generated in the entire month of Feb 2020. Addressing the cryptocurrency scenario in India, the Finance Minister said in a CNBC-TV18 interview, “I can just only offer you this clue that we aren’t closing our minds, we are looking at ways by which experiments can occur in the digital world and cryptocurrency.”
Rather than sitting on the side-lines, investors and stakeholders want to help make the best of proliferating the digital coin ecosystem until the government introduces the ban on “private” cryptocurrency and announced sovereign digital currency.
Once considered a “Boys club” as a result of predominant male population engagement in the cryptocurrency market, the steadily rising amount of women investors and traders has resulted in more gender neutrality in the newest and digital type of investment methods. Earlier, women used to stay glued to traditional investments but now they are becoming risk-takers and venturing in to the crypto space in India. After the apex court clarified the legality of “virtual currency”, the Indian cryptocurrency platform, CoinSwitch witnessed an exponential 1000% escalation in its women users. Although women investors still constitute a small percentage of the crypto community, they are putting up fierce competition in the Indian market. Women tend to save lots of much more than their male counterparts and more savings means more diversity in investments such as for instance high-return assets like cryptocurrencies. Also, women tend to be more analytical and better at evaluating risks prior to making the best investment choices, so they are more successful investors.
Increasing Mainstream Institutional Adoption of Cryptocurrencies
Uncertainty and panic aroused by SARS-Covid 19 resulted in a liquidity crisis even ahead of the economic crisis set off. Many investors converted their holdings into cash to safeguard their finances, which resulted in the collapsed prices of bitcoin and altcoin. But even though crypto suffered a significant crash, it still managed to be the most effective performing asset class of the year 2020. With the increased vulnerability of the system and lack of trust in the policies of the central bank and money in its current design, individuals have an elevated appetite for digital currencies which resulted in the rebound of cryptocurrency. As a result of stellar performance of cryptocurrency in the center of the global financial crisis, the uptrend has strengthened fascination with the virtual currency market in Asia and the remaining world.
Furthermore, to fuel society’s demand for convenient and reliable transaction solutions, digital payment gateways such as for instance crypto signals PayPal also have shown their support towards cryptocurrencies that can enable consumers to keep, buy, or sell with virtual assets. Recently, Tesla CEO Elon Musk made an announcement of investment in the cryptocurrency market worth USD1.5 billion, and that the electric company would accept bitcoin from buyers, which resulted in an international bitcoin price jump from USD40,000 to USD48,000 within two days. Two of the largest platforms for making payments across the entire world, Visa and Mastercard may also be endorsing cryptocurrencies by introducing them as a moderate to create transactions. While Visa has made the announcement of allowing transactions with stable coins on the Ethereum blockchain, Mastercard would begin transactions with crypto sometime in 2021.
What does the future hold for the Cryptocurrency market in India?
The Indian cryptocurrency market isn’t immune to the terrible crypto crashes. Despite humongous investment from global counterparts, local investors are still maintaining distance from crypto investments as a result of uncertainty about the legality of the digital coin ecosystem in India in addition to the high volatility of the market. Although the cryptocurrency market is booming since this past year, Indians own significantly less than 1% of the world’s bitcoin, which creates a strategic disadvantage for the Indian economy. The Indian government is about to appoint a new panel to study the possibility of regulating digital currencies in the united kingdom in addition to give attention to blockchain technology and propose it for technological enhancements.
The ability of blockchain technology to provide a safe and immutable infrastructure has been realized by various industries to instill transparency in transactions. For a country with over 15 million crypto adopters, the newest recommendation from the committee could hold great value to determine the ongoing future of cryptocurrency in India. However, the stakeholders feel that the technical and economic power is likely to make India a key player in the crypto and blockchain market. Gradually, the cryptocurrency is gaining mainstream acceptance, which could lead to raised adoption of digital currency.